The European Union (EU) announced today that Microsoft is guilty of abusing its "near monopoly" in desktop and server OSs and fined the company a record $613 million. Additionally, the EU gave Microsoft 90 days to offer European computer makers a new Windows version that doesn't include Windows Media Player (WMP) and 120 days to give competitors the vital information they require to write software applications that work more closely with Windows Server products. The EU's restrictions and requirements are limited to the European market only "in deference to the competition authorities of the United States and other countries," according to EU Competition Commissioner Mario Monti. Microsoft says its proposed settlement, which the EU shot down last week, would have been better for consumers. The company vows to appeal this decision to an EU court in Luxembourg.
"Today's decision restores the conditions for fair competition in the markets concerned and establishes clear principles for the future conduct of a company with such a strong dominant position," Monti said. "We are not expropriating Microsoft's intellectual property. We are also not breaking new legal ground either in Europe nor in the US. I am confident that we have produced here a decision that will stand before any appeal. I do not believe that Microsoft, with its resources and knowing of the allegations outlined during the course of the investigation over the past 5 years, was not aware that it could be breaking EU competition law."
The EU decision includes the following ramifications for Microsoft: - The $613 million fine might be the largest in EU history, but it's unlikely to cause much hardship for a company that has more than $50 billion in cash and liquid assets. To put the fine in perspective, it's technically smaller than the company's outlay in its settlement with the state of California, although most of that $1.1 billion deal involved computer and hardware vouchers, most of which will never be redeemed. - The requirement to ship a Windows version without WMP hits Microsoft square in its corporate jaw, given the company's decade-long approach to bundling technologies into Windows. Microsoft has made and destroyed markets based on which technologies it includes in Windows. And for every example of a positive move (e.g., the integrated TCP/IP stack in Windows 95), there are dozens of disruptive moves (e.g., Microsoft Internet Explorer's--IE's--effect on Netscape and dozens of other now-forgotten but innovative browser companies). How PC makers will react to this choice is currently unclear, but the requirement could save money for PC makers with third-party media player deals--think HP and its iTunes deal with Apple Computer--because Microsoft is expected to offer this "Windows Lite" version at a discount. - The requirement to supply third parties with technical information about Windows Server products is a toss up. Although such companies could use the information to create products that might ultimately defeat Microsoft products in a free market, those third-party products would also strengthen Microsoft's position in the server market by making the company's server products more valuable. Basically, this requirement is a wash: Microsoft would have been wise to have simply agreed to provide this information a long time ago.
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Good reporting, Paul. Seriously. And you're right...any fine imposed by the EU should have started with a "B". As in "Billion(s)". Anything else is too little when you have 50 billion in the bank. It's akin to swatting an annoying mosquito off your arm for a money-hoarding non-dividend-paying abusive monopolist like Microsoft.
Wendy Rebecca March 24, 2004
Why would anyone expect the price of Windows to change when Media Player is free?!
Jonathan Davies March 24, 2004
At this point in time with so many alternatives available - both in operating system distros and hardware plaforms - Microsoft finds itself with a 'near monopoly' only because what people want is Windows.
Stephen March 24, 2004
Really all these components come down to two pieces... the interface and the APIs. The APIs really are critical to operating system advance. I think what many people are complaining about is that front-ends have been bundled with system. These can now be disabled because of the US decision. Also PC makers should be able to bundle selected software.. not that I think this ultimately benefits customers because all the software is pretty much crap (IMHO).
One fundamental problem is that Microsoft isn't producing crap. It generally produces software that is either the best of its class, the best advertised of its class or a combination of the two.
I've tried every major media player out there. WMP is best in my opinion. I've tried both Mozilla (Firefox and not) and IE and while Firefox is better, its not well advertised and its not hugely better. I've tried all the different IM clients and Trillian is by far the best. I use it, but again, MSN Messenger isn't that much worse and in a lot of ways is better. I can't really speak about the other offerings (Movie Maker, Calculator, Notepad, Wordpad, etc). Though I find that they're not really ever complained about.
The real problem is that Microsoft with the possible exception of IE hasn't taken a lax attitude with its software. It does produce quality stuff. Even if WMP wasn't installed by default, I'd go and download it. I've removed the interfaces for IE and MSN Messenger and that for me has been enough.
Orion Adrian March 24, 2004
My thoughts exactly Jonathan, this Windows 'Lite' version they are asking Microsoft to make available whilst it should not cost more than the standard Windows it should not cost less either since all the components they are being asked to remove are free downloads. So Windows 'Lite' will be a big hit amongst those who lose sleep over the thought of having to use the tools available in XP to make IE etc. dissappear but for the rest of us we will continue to purchase the full version of XP since this spares us having to download it or hunt for it when we are reloading some machine 5 years from now.
John Thurlow March 25, 2004
I'm going to have to agree with Orion here. Microsoft's products are just (for the most part) better than the competitors. There are so many choices out there for anyone who feels Microsoft's products are inferior but the reason why no one uses them is because they suck. Take WMP...what competitors do you have? Real Player, Quicktime and maybe some lowly ones like Media Player Classic or the DivX player. Most of those are awful products. They just don't compete with Windows Media Player. The only thing that competes with WMP on my computer is Windows Media Center (which beat out ATI's Multimedia Center on my computer).
It's for the best that Microsoft bundles. A new user who doesn't know how to use a computer expects it to work when it first boots. Sure you could say it's the responsibility of the builder to make sure it's done right but that doesn't always happen. I think everyone's just trying to bully Microsoft and earn a couple of bucks.
Kain March 26, 2004
I can't believe the replies that I'm reading; "Microsoft's products are just better...". What is best at MS is their cut-throat marketing, their products are mediocure raised to become a standard.
Even though I like WinXP Pro in general some of the "free add-ons" drive me to distraction. (i.e. Windows Messenger insists that I get its latest version, over & over & over, until it actually locked up the system - even tho I had it disabled!)
Many of the better products have been bought up by MS in order to kill them or at least co-opt them (FoxPro comes to mind).
I could rant like this for hours, how they use their end customers as Beta-testers (with out letting them know, of course) or how they push products out so fast that we have to get daily patches... but by now you get the idea. Well, at least I can try to make sure that no more of my $ goes to them.
Steve Cohn April 02, 2004
I agree with the pro microsoft people. But nobody mentioned winamp, it is media players closest rival, apart from the fact that you have to pay for some versions (I am surprised MS hasnt made a deal with Nullsoft yet). msn messenger is so much better than yahoo, aol and icq.
Also a large majority of the people complaining about Microsoft's products use Windows everyday, and most problems that arise are user faults anyway.
And finally, if a builder hasn't done it's job by making sure everything works, its just bad PR. IMO
jsavage May 13, 2004
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Wendy Rebecca March 24, 2004