COMMENTARY--Every time I move to Ireland, a ruling in Microsoft's interminable struggle with antitrust authorities is handed down.
Given this remarkable coincidence, I've concluded that Microsoft's best chance to end its antitrust tribulations is to pay me to stop moving. I'm thinking a Greek island, though I WILL require a satellite broadband connection, which would be more internet bandwidth than I'm managing now, given that I can't get DSL OR Cable Broadband at an apartment which is practically at Dublin's epicenter.
Random preamble aside, it shouldn't surprise anyone who has waded through my past wordy prognostications that I disagreed strongly with the decision issued recently by European competition authorities in Brussels.
I think antitrust is bad policy, and have long argued that it is a relic of a time when governments were attracted to the notion that smart groups of people could better manage an economy than the "chaos and waste" of free markets. As I've noted in a past article, however, there are "less bad" things that antitrust regulators can do.
I take less offense at the notion that Microsoft should be required to license all protocols and technology required for proper interoperability. What really annoys me, however, is when design decisions for Windows get taken away from programmers in Redmond and handed to regulators in Brussels. I also resent the tendency to retroactively penalize action which, up till a negative antitrust ruling, a company has every reason to expect was perfectly legal.
The "less bad" parts of the decision
Microsoft is the maker of the dominant operating system in the world. Clearly, however, they aren't the only operating system. These alternatives will have an easier time navigating a world where Microsoft products predominate if they have access to the technology which enables them to talk, if not act, like Microsoft's own products.
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I'm glad that the ruling spoke of LICENSING such technology. Microsoft has the right to charge a fee for access to its intellectual property, much to the consternation of certain people in the open source/free software movement who would have preferred that such technology get dumped into the public domain, beyond the reach of licensing fees. As I noted in a previous article, the open source movement's "problem" with licensed (and fee-based) IP is one of their own making, and NOT justification for the government-sanctioned theft of Microsoft's property.
The "bad stuff," removing Media Player
Requiring that Microsoft remove Media Player sets a horrifying precedent. Push aside for a moment any antipathy towards Microsoft you might harbor and imagine what it would be like to have bureaucrats in Brussels dictate what you are allowed to include in your OWN software. How much would this slow development?
At first glance, the remedy may appear innocuous. Microsoft must release two versions of Windows, one with Media Player integrated, and one without. Microsoft doesn't have to charge a lower price for the Media Player-free version, though that is more the result of realpolitik than a consensus among EU competition commissioners. The European Court of First Instance takes a dim view of attempts to dictate prices, and so the best the commission could manage was a requirements that the Media Player-free version not cost MORE than the version with Media Player included.
It is likely that MOST will end up choosing the version with Media Player included, given that most would prefer a version with more features for the same price. That's a problem, because it might provide future justification for the commission to weigh Microsoft down with even more regulatory requirements (don't like getting beaten by the competition in track meets, make the competition wear lead underwear). Apart from that, however, it means that developers, both within Microsoft and without, will no longer be assured that a media player with certain performance characteristics and a particular set of reusability APIs is included on Windows.
Ask yourself why it is important that the Internet be unified around a single communication protocol, TCP/IP, or that the Web is dominated by the HTTP protocol. This standardization enables applications which would not be possible given a diverse computing architecture of the sort advocated (well, if you read between the lines) by people like Bruce Schneier and the CCIA. Developers can make certain assumptions about the technologies available to them in their applications, and act accordingly.
The same applies in media playing. Granted, Media Player isn't "open" technology like TCP/IP or HTTP, but that's like comparing apples to apple pie. HTTP and TCP/IP are low-level protocols, in some ways like HTML. In contrast, Media Player and Internet Explorer (IE) are "high level" technology. IE understands and interprets STANDARD HTML. There's a lot of stuff, however, that isn't standardized by the HTML standard, such as the manner in which you reuse or extend HTML rendering functionality.
Microsoft provides the high-level glue between the open standards that evolve slowly as requirements become better understood and real-world developer and consumer needs which evolve at supersonic speeds. That's Microsoft's value proposition, and taking away their ability to offer it by, as examples, integrating HTML rendering or media playing into Windows behind well-defined APIs, destroys a business model judged useful by billions of consumers. That has ramifications for Microsoft, to be sure, but it also has ramifications for developers, who have less standard functionality upon which they can rely, and consumers, who will have fewer applications that take advantage of the latest technology has to offer.
As a final point, forcing Microsoft to provide an a la carte operating system forces them to adopt a design which looks a lot like Linux. As Kollar-Kotelly noted in her ruling, there is no justification "to convert certain legitimate aspects of Microsoft's business model and/or product design into a model which resembles that of other industry participants simple for the sake of changing the status quo."
Penalizing the formerly legal
A common complaint I have against antitrust is its tendency to turn what was previously legal illegal, and then penalizing the offending company for actions performed before the shift. That certainly applies to the EU's recent antitrust ruling.
Microsoft was fined approximately 500 million euros for doing something that was never declared illegal. Even Mario Monti admitted as much, noting his interest in setting a precedent that could be used in future antitrust investigations of software companies.
If a new precedent is being set, what justifies penalizing a company for actions performed before that precedent was set? It would be a bit like passing a law making the ownership of green bikes illegal, then fining anyone who ever owned one 1000 euros. If the EU's remedy stands up to judicial muster and Microsoft violates it in future, then there is cause for a fine. As things stand, however, it's just gravy for European governments (the fine will be distributed among EU members).
Parting Thoughts
Pulling out my crystal ball, I expect that most of the ruling, particularly the part related to the fine and the forced removal of Media Player, will be overturned, while the parts related to opening protocols will be maintained. Others think I have that backwards, given the court's past defense of intellectual property. They're wrong, of course (ha ha).
Assuming I'm right, the result would be the harmonization of European and American antitrust regulation of software companies. Europe, as a part of the world endeavoring to harmonize economic regulations among 25 separate nations (including the 10 joining on May 1st) should understand the importance of that more than anyone else.
biography
John Carroll is a software engineer now living in Ireland. He specializes in the design and development of distributed systems using Java and .Net. He is also the founder of Turtleneck Software.
| 03/30/04