- Related Stories
-
EU knocks Microsoft with $357 million fine
July 12, 2006 -
Europe plays hardball with Microsoft
March 24, 2004
In reprimanding a company nearly a week before its own regulatory compliance deadline, the Competition Directorate General's arbitrary behavior stands far outside the norm, revealing a regulatory body whose process has strayed well away from needed transparency by plainly disregarding calls for due process and clear regulatory guidance from industry participants.
Regulatory decisions should be clear, consistent and fair in order to properly guide markets. A transparent process is key to reaching such guidance.
After the standard for Microsoft's documentation compliance became apparent (through an agreement between the commission, its trustee and the American company in spring 2006), all scheduled compliance deadlines have been met. Microsoft has made it clear that it fully expects to meet the recently revealed compliance hurdles by Tuesday, the last of the agreed-upon deadlines.
Yet the commission issued its staggering fines for "non-compliance" almost a full week before the agreed deadline.
With this capricious action, the commission jeopardizes its ability to impartially regulate the information and computing technology industry in the European Union. Potential market leaders in Europe now rightfully ask how they can know the rules of the road when the regulatory authority articulates the guidelines only as a "we know it when we see it" standard. The answer is, we can't. No set of clear rules presently exist except for those gifted with regulatory clairvoyance.
Throughout the commission's opaque process, it has never been able to identify quantifiable consumer harm. On the contrary, evidence provided to regulators and the court, as well as anecdotal market data, strongly suggests that both the markets for Media Player and server technologies actually thrive. Much to the commission's chagrin, consumers and competitors have reaped tremendous benefits wholly independent of the commission's policing authority. That complex, technological markets can flourish without European Commission intervention causes the regulatory body immense consternation. Thankfully, it has had little or no role to play in the design of IT products to meet consumer demand.
That is, up until now.
There can be nothing more invasive and disruptive than the imposition of arbitrary and irreversible rules that seek to "level the playing field" for "harmed" competitors through mandated, government design of market-leading products, as well as forced expropriation of highly valued intellectual property given freely to risk-averse, multinational "competitor" corporations.
Legitimate, innovative companies will avoid risk and the zealous hunt for innovation where they see regulatory quicksand, as witnessed here by the commission's latest fines.
Should the commission's regulatory hubris remain unchecked, its appetite will know no bounds. In other words, competitors who seek gain from the commission's amorphous process may themselves find their companies in the unfortunate position of being a market leader, caught within the crosshairs of commission jurisdiction.
We hope "knowing it when we see it" does not become the new commission rulebook, but we fear that the impulse to regulate in this manner will prove too lucrative to commission officials and others who cannot control the fast-paced dynamics of competitive markets.
This latest action by the European Commission is greatly disheartening. The precedent, which the commission seeks to inflict on the digital market, will undoubtedly be to the detriment of European consumers as well as the European ICT industry.
Biography
Hugo Lueders is European public-policy director for the Computing Technology Industry Association. Microsoft is a member of the trade group.
See more CNET content tagged:
commission,
regulatory compliance,
compliance,
deadline,
Europe
rubbish from the FUD department at Microsoft.
It's a fact that Quicktime and Realplayer are already preloaded onto nearly every new computer and have been for years. Despite that the EU went ahead and "convicted" MS of using it's monopoly position to bundle it's own media player into Windows despite the fact that the media player was bundled into every version of Windows since Windows 3.0 was introduced. They also demanded that MS produce complete documentation for their server networking protocol (which was invented by IBM in case you didn't know) and rejected the first draft MS gave them but then took months to say why that first draft was wrong.
Irregardless of whether MS used or misused it's monopoly position in the market, the rulings from the EU court are obviously designed to extract large amounts of cash from MS but instead of using real facts they settled for using the first flimsy arguments that came along.
Personally I like the idea of being certified on Microsoft systems by a third party who also provides certification for linux, novell and other solutions.
Either way, the point is that CompTIA either does or has well represented itself as an expert organization looking at the whole technology industry not just one peice of it.
Also, after months of Mickeysoft fanboys emotional arguments against the socialist, communist red-threat of the democratic EU towards American technology and proprietary freedoms as we know it. And, Oh the children! Won't someone think of the Children! Oh Golly! Oh,.. . Golly. (The Scrubs fans will understand that last bit) . . .
- it's nice to hear the other side of the argument from a professional with the technical knowledge to speak about it without Microsoft's hand directly down his pants.
1. Microsoft was ruled to have broken European competition laws in March 2004. Their compliance was reviewed in December 2005 (over 18 months after the official ruling) and found to be significantly lacking in the area of standards documentation. The EU, at that time, stated that they would fine Microsoft on a daily basis if they did not comply, but that they would give them 6 months to meet the requirements of the ruling. It was stated at that time that an official ruling would be declared on 12th July 2006. It was (check the CNet archives if you don't believe me). Microsoft were still found to be in non-compliance. They were fined exactly as stated, for the amount stated, at the time stated. Things just don't come much more 'transparent' than that.
2. Apparently, "evidence provided to regulators and the court, as well as anecdotal market data, strongly suggests that both the markets for Media Player and server technologies actually thrive". Well, I personally would love to see that report. The EU spoke to both Europe-based and Europe-trading companies who actually 'compete' with Microsoft in those markets and ruled based on the results of those conversations. I suspect that Mr. Lueders is confusing competitors with partners and resellers. Understandable when Microsoft's recent actions prove a similar level of confusion within the company (Google on 'ballmer coopetition' if you don't believe me).
I'll leave the rest as an exercise for the reader and recommend a more 'impartial' source if you're after real news.
2. The evidence is both plain and obvious, try finding a PC with Windows sold in the last five years from any major vendor *without* Quicktime and/or RealPlayer bundled with it. How obvious does the evidence have to be before you can see it?
Personally. I think all MS shareholders should file a shareholder action against the EU to get the fine money back, and put it into shareholder value.
Makes me digress: I wonder just how popular the Media Player-less Windows is selling over there.
Sun, if you can't figure out how to connect to a MS-Server after all this time, you need to hire some new programmers!!
EC doesn't act on its own - it responds to complains of market participants.
There were two complains: from Real and from Sun. And here you have it: M$ has abused monopoly. For case of media player bundling - brought by Real - the decision was to unbundle. For case of server APIs - brought by Sun - the decision was to document.
Read the case before commenting. Or at least read european press where coverage of the case is more complete.
Transparency of the proceedings => an issue. Where does one find the "clearest" European Press documenting the case? Unfortunately, I can only read English.
EU on Media Player
Real.com brought the media player suit, OK. The Real fellow is the same fellow that mis-spoke to the U.S. Congress. It's probably written as mis-spoken, but if you hear/speak w/ Mr. Glaser there's an integrity issue (intentional misstatement equals a ???).
Sun/IBM?:
Maybe I can review what was version (a) originally requested , version (b)revised request , and summary of what was provided for each?
Was this:
a) missing the point in material provided, or
b) request was really from the guys who need to bolster their reputation inside their corps.
Another "limited perspective", I can not hit a software deliverable unless there is a "firm spec". "EU doc spec" changes?, clarified? I read there were few words in the original order on what was required.
Huh? M$ started moving its arse weeks before deadline - so commission has to give the good boy a candy like another extention?
That's not US. M$ was obliged to comply with court order within one year. They got (courtesy of EC) almost one year extension. And yet they have waited till last moment.
And now they have to pay new fines to EC, they have to pay to you (and other M$-paid "thinktanks") and newspapers so all that mess would look less messy and more presentable to shareholders.
Most complete coverage of the case is provided by TheRegister. Read on. http://www.theregister.co.uk/2006/07/12/commission_announces_fine/
I buy Microsoft software because it is the best out there for my purposes, not because I am paid by them. Microsoft has proved itself a winner, in the business market, where it counts. Losers cry all the way through the court system, winners just cruise on!!!
Go Microsoft, **** Europe. Bring all your European jobs back home (or take them to India) and close up shop there. Just sell through agents and get out of the den of thieves. Nuke 'em with intelligence and double the price they pay for windows. Laugh all the way to the bank (and send my commission to my offshore account)
But neither are believable events.
MS sharehholders should sure the EU, just on the principle that it is the sahreholders who matter, not keeping some EU functionary all bribed and happy.
I have talked to and read comments from various developers about the value in MS documentation of Windows, and are people who believe that the documentation is sufficent and other who say its now. In the end its a matter of who you ask.
Microsoft released Media Player for Win3.0 as an add-on, then
with Win3.11 officially released Windows Media Player in 1992.
And bundled it in Windows 95 in, well, 1995.
try http://en.wikipedia.org/wiki/Windows_1.0 and then search
from there.
Real was founded by Robert Glasner in 1994 and the first Real
player was released in 1995.
So Microsoft had a product on the market 3 years before Real.
As for the API issues, Win1.0 had API's - called .dll for example.
(Now we see them also as *32.dll- and OpenGL, etc.... ) That was
1985. You can download - for free - a Software Development
Kit (SDK) from Microsoft which gives you access to all of the
Windows API's - which are freely distributed in every CD of
Windows95, 98, NT, 2000, etc... (DVD for Vista).
The ruling was wrong. The way the EU court did not stop the
clock when Microsoft first responded was wrong, but no big
surprise after the bogus ruling. And the way everyone is
gloating over "Microsoft get's caught" is also wrong. Microsoft
software is used on almost every PC on the planet and outlasted
all challengers, exept Macintosh. With the new Mac Intel
systems, Microsoft (and all other PC manufacturer's) are in
trouble. But they will probably cry "foul" and sue as well.
I doubt it. Microsoft would encourage it as a way to put its operating system on macs (just another sale as far as they're concerned). I don't think the other PC makers are too concerned as the lowest price mac is well above the average price consumers are willing to pay for a PC.
I'm under the impression that running windows on a mac can do more harm than good for apple.... microsoft tempting eve with an orange in the garden of eden.
Legitimate, innovative companies will avoid risk and the zealous
hunt for innovation where they see regulatory quicksand, as
witnessed here by the commission's latest fines.
So does this Microsoft will now "avoid risk and the zealous hunt
for innovation"?
I think not. This is small drop in the bucket for Microsoft and
will not alter the way they or any other company does business.
What a bunch of horse hockey.
Legitimate, innovative companies will avoid risk and the zealous
hunt for innovation where they see regulatory quicksand, as
witnessed here by the commission's latest fines.
So does this Microsoft will now "avoid risk and the zealous hunt
for innovation"?
I think not. This is small drop in the bucket for Microsoft and
will not alter the way they or any other company does business.
What a bunch of horse hockey.
Traditionally, most would-be competitors had no reason whatsoever to believe Microsoft would be confined to fair business practices. Instead, that company would leverage its Windows monopoly to achieve a dominant distribution status. PC manufacturers and PC users collectively get to decide the distribution levels for Real Player and other media players. On the other hand, Windows Media Player will be widely distributed regardless of the wishes of consumers or PC vendors, because of Microsoft's monopoly status and bundling practices. The European commission merely asked that Windows Media Player be subjected to the same distribution environment all other media players have to contend with.
The way Microsoft used its Windows monopoly to crush Netscape represents a far greater disincentive to innovation than whatever minor mistakes the European commission may have made. Putting an end to such illegal and destructive business practices--as the European commission is apparently trying to do--will help foster an environment of risk taking and innovation.
were being gung ho and maverick about the media player ruling,
why dd south korea find more or less the same verdict. In fact I
believe that there have also been several antitrust verdicts in the
USA.
And with XP nearing the end of its shelf life, no version of XP has
hit the shelves without WMP or IE pre loaded. No version of
VISTA has been announced without either of these pre loaded.
This is contrary to verdicts around the world and yet Microsoft
still chooses to go to court - knowing that by the time a verdict
has been reached and all the appeals have been settled, the
point will be academic because of the short shelf life of the
product.
This verdict says more about the fact that microsoft is not 'above
the law' as was quoted last week.
were being gung ho and maverick about the media player ruling,
why dd south korea find more or less the same verdict. In fact I
believe that there have also been several antitrust verdicts in the
USA.
And with XP nearing the end of its shelf life, no version of XP has
hit the shelves without WMP or IE pre loaded without
government intervention. No version of VISTA has been
announced without either of these pre loaded.
This is contrary to verdicts around the world and yet Microsoft
still chooses to go to court - knowing that by the time a verdict
has been reached and all the appeals have been settled, the
point will be academic because of the short shelf life of the
product.
This verdict says more about the fact that microsoft is not 'above
the law' as was quoted last week.
- Both fair and unfair.
-
by ajbright
July 20, 2006 5:36 PM PDT
- The unfair part concerns the media player. Why can't consumers expect a very expensive OS to provide basic functionality such as viewing or listening to media files? Just because Real Media would like charge for this functionality doesn't mean the EU commission should be allowed to fine Microsoft for providing it for free.
-
Reply to this comment
-
See all 50 Comments >>On the other hand the complaint over being able to co-exist with Microsoft networking software is entirely legitimate. All they're being asked to provide is the documentation necessary to communicate with their server software.
Linux, Unix, Solaris, Novell all have such documentation available. It's common practice to allow developers to produce software that will talk to yours.
If Microsoft didn't provide such documentation for other areas of their OS, it would be impossible to do things like create windows, talk to IO devices, communicate with their file system, etc. Subsequently it would be impossible to software or hardware that works on Windows systems.
In a world where Microsoft owns a 90%+ OS market share, such an attitude would not allow for any competition to their own productivity software. They would be able to decide which markets they want to dominate and prevent any other developer from producing competing software.
So in this respect the EU has got this part of the case right. As recently as Monday Microsoft has tried to say it couldn't produce the required documentation (apparently they don't have anyone working for them that fully understands how their network software works.. yeah right!), so the decision to fine them before the deadline is merely in line with Microsoft stating they wouldn't be complying with the commissions demands.
What they've done is basically go in front of the Commission and say 'You have to change your ruling, because we're not going to comply with it' 'Why aren't you going to comply with it?' 'because we don't employ anyone who understands how our own software works'.
Whether you view such an argument as arrogance or just plain stupidity, it doesn't change the fact that the Commission would have had no credibility if they didn't enforce their ruling immediately and punish Microsoft for taking the p!ss.