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ECIS: What's Wrong with Microsoft's Browser Self-Remedy - Case to Continue - Updated
Friday, June 12 2009 @ 10:40 AM EDT

ECIS, accepted as an intervenor in the European Commission's Microsoft browser antitrust case, has now released a statement [PDF] explaining all that it feels isn't enough about Microsoft's self-remedy. It's titled, Too Little, Too Late, and it says that while the remedy might have been appropriate in 1997, now that there have been "decades of abuse" further action is needed.

And the EU Commission says it will continue with the case, despite the Microsoft announcement:

Europe's top antitrust regulator said in a statement released overnight that it "notes with interest" Microsoft's statement, which was made in a blog post late Thursday in the U.S. But the EC said it would proceed with the case, and would draw up a remedy that allows computer users "genuine consumer choice"....

"Rather than more choice, Microsoft seems to have chosen to provide less," it said.

If you'd like to follow along more closely, here's the Microsoft browser page, and here's the EU Commission's page on Microsoft's previous case, and here's the page explaining EU antitrust law and finally, here's the EU Commission January 14, 2008 announcement that it was opening formal investigations into two areas with respect to Microsoft, tying of the browser and interoperability, explaining the legal basis.

The browser issue is more than just the browser:
As for the tying of separate software products, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies. In a complaint by Opera, a competing browser vendor, Microsoft is alleged to have engaged in illegal tying of its Internet Explorer product to its dominant Windows operating system. The complaint alleges that there is ongoing competitive harm from Microsoft's practices, in particular in view of new proprietary technologies that Microsoft has allegedly introduced in its browser that would reduce compatibility with open internet standards, and therefore hinder competition. In addition, allegations of tying of other separate software products by Microsoft, including desktop search and Windows Live have been brought to the Commission's attention. The Commission's investigation will therefore focus on allegations that a range of products have been unlawfully tied to sales of Microsoft's dominant operating system.
"Microsoft must give users real choice, and this should include not just buyers of new computers, but also existing users," the ECIS statement says. Windows 7 hasn't been released yet and it won't be until later this year. What is the remedy for ongoing abuses or the installed base of 90 percent of personal computers? Further, this is not a world-wide solution, and without a world-wide solution, ECIS states, the anti-competitive network effects will continue to impact European users. Then there is the issue of Microsoft's history of "vitiating measures designed to promote competition". And then, ECIS addresses Silverlight. "Commitments are needed to avoid circumvention of the illegal IE tie by tying other Microsoft products such as Silverlight," ECIS says.

What remedy would ECIS like to see? The Commission's ballot screen remedy set up so that buyers of new PCs are provided with a preloaded ballot screen or a browser that is not IE, to be selected by the OEMs. For the installed base, Windows updates and IE updates would come preloaded with other browsers and a ballot screen.

Read on for the details. Also, the full EU Commission statement is now available, and you can find it as an update to yesterday's article.

Interestingly, Apple just announced something that indicates that users do want more choice:

Apple on Friday announced that Safari 4, the new version of its Web browser for Mac OS X and Windows, has been downloaded more than 11 million times in the first three days of its release....The 11 million figure includes 6 million downloads for the Windows version of Safari.
Apple says Safari loads HTML Web pages more than three times faster than IE 8, which might explain the enthusiasm.

[ Update: If you are interested in the US law on illegal tying, you will enjoy reading a recent decision granting an Apple summary judgment motion in the Apple iPod/iTunes antitrust class action. The judge explains how the law stands, what makes tying illegal, and what the elements are, and why Apple in that litigation isn't guilty of it.]

*************************

Too Little, Too Late

After 13 Years of Abusive Tying Practices, Microsoft Must Do More to Undo Entrenched Network Effects and End Consumer Harm. The European Commission Should Insist on Real Consumer Choice. Its Ballot Screen Remedy Is Still Needed.

Brussels – 12 June 2009 – “Microsoft offers to unbundle IE and Windows 7. The current Microsoft announcement is too little, too late. Such a move would have been appropriate in 1997, but further action is needed to undo the effects of a decade of abuse,” said Thomas Vinje, Legal Counsel and Spokesman to ECIS. Microsoft must give users real choice, and this should include not just buyers of new computers, but also existing users.

For ECIS Microsoft’s announcement is lacking because:

  • Abuses continue. Windows 7 will only be released later this year. No measures are announced to address ongoing abuses or the installed base of IE on over 90% of personal computers which Microsoft has built up over the last decade through its illegal tying practices even though rival products were better.
  • Reports indicate that Microsoft does not intend to offer this remedy on a worldwide basis, continuing to deprive consumers in other regions of a choice of browsers and further deepening anti-competitive network effects that will impact European users.
  • Microsoft has a history of vitiating measures designed to promote competition. Microsoft must commit to giving personal computer manufacturers (OEMs) and consumers a real choice and not replace the illegal tie with other actions or financial incentives meant to replace the technical tying of IE and Windows.
  • Microsoft must refrain from using its super-dominant Windows platform to replace the illegal tie with other leveraging practices. Microsoft must also put an end to its practice of overriding user default preferences for other browsers, calling up IE code even when users have chosen to uninstall IE or using its Windows update function to distribute IE to the detriment of alternative browsers.
  • Microsoft must commit to finally putting an end to its illegal tying practices for all separate products, not just WMP and IE. After foreclosing competition in the media player and browser markets, Microsoft should not eliminate competition for other applications through similar tying practices.
  • Commitments are needed to avoid circumvention of the illegal IE tie by tying other Microsoft products such as Silverlight.

“For the above reasons, the Commission’s proposed ballot screen remedy which provides consumers with a REAL choice remains necessary,” Vinje stressed. This remedy would mean that buyers of new PCs be provided with the preloaded ballot screen or an alternative browser other than IE as selected by the OEMs. For the installed base of IE users, Windows updates and IE updates would come preloaded with other browsers and a ballot screen. The ballot screen with a choice of at least five preloaded browsers should also be provided to customers who buy Windows through the retail channel to upgrade their PCs.

About ECIS

ECIS is an international non-profit association founded in 1989 that strives to promote market conditions in the ICT sector allowing vigorous competition on the merits and a diversity of consumer choice. ECIS has actively represented its members on many issues related to interoperability and competition before European, national and international bodies, including the EU institutions and WIPO. ECIS’ members include large and smaller information and communications technology hardware and software providers Adobe, Corel, IBM, Nokia, Opera, Oracle, RealNetworks, Red Hat, and Sun Microsystems.


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