03 June 2009

Standing up to the Playground Bully

The EU is contemplating some further action against Microsoft:

Frustrated with past efforts to change Microsoft Corp.'s behavior, European Union regulators are pursuing a new round of sanctions against the software giant that go well beyond fines.

The regulatory push is focused on a longstanding complaint against Microsoft: that it improperly bundles its Web browser with its Windows software. Rather than forcing Microsoft to strip its Internet Explorer from Windows, people close to the case say, the EU is now ready to try the opposite measure: Forcing a bunch of browsers into Windows, thus diluting Microsoft's advantage.

The sanctions would come from an EU investigation that began last year. In a sign of how rapidly the case is progressing, these people say, the possible penalty has emerged as a key focus in discussions between the parties.

Inevitably, this suggestion has led to whining about how nasty those eurocrats are, and how unfair to pick on little old Microsoft, and what a crimp on innovation all this is.

How utterly pathetic.

What we are seeing is teacher starting to get heavy with the playground bully - one who, despite a decade of warnings, continues to abuse its monopoly position. What we are seeing is an institution that finally has both the will and means to place limits on what are acceptable business practices.

Of course, forcing Microsoft to give people a choice of browsers when they start up Windows will make little difference to the that market, but that's not the point. The point is the punishment - a further reminder that Microsoft is under scrutiny, and that further serious financial sanctions are always an option. It's absolutely the *right* thing to do, because Microsoft's behaviour for the last two decades has been absolutely the *wrong* thing to do, and it is finally being called to account.

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einfeldt said...

Hi Glyn,

As a lawyer, I can tell you that there are problems with the enforcement of mandatory injunctions such as forcing Microsoft to install browsers. Mandatory injunctions have, since time immemorial, been seen by lawyers and courts as problematic to enforce, because the creative miscreant, such as Microsoft, always finds ways to avoid compliance and to tweak compliance in their favor, by ensuring that the adverse web browsers don't work well.

A better solution would be the systemic solution, breaking up Microsoft. Behavioral solutions have historically been weak throughout the history of anti-trust.

We need to break-up Microsoft. Its repeated non-compliance with prior anti-trust orders demonstrates the wisdom of a system approach.

Glyn Moody said...

I agree that mandatory injunctions are a problem to enforce, but since I don't think they are very effective anyway, that doesn't worry me. I think it's good that Microsoft be punished, publicly, in this way, because it reminds people we're dealing with a monopolist.

As for the break-up, it sounds good, but I fear that in practice it would actually be *good* for Microsoft - it's precisely what I'd do if I were running the company....