Linked by Thom Holwerda on Mon 17th Sep 2007 15:17 UTC, submitted by Rahul
Legal Microsoft suffered a stunning defeat on Monday when a European Union court backed a European Commission ruling that the US software giant illegally abused its market power to crush competitors. The European Union's second-highest court dismissed the company's appeal on all substantive points of the 2004 antitrustruling. The court said Microsoft, the world's largest software maker, was unjustified in tying new applications to its Windows operating system in a way that harmed consumer choice. The verdict, which may be appealed only on points of law and not of fact, could force Microsoft to change its business practices.
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RE[6]: APIs
by MollyC on Tue 18th Sep 2007 18:08 UTC in reply to "RE[5]: APIs"
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"I don't know if it's on purpose or not but it seems to me that you are taking what one EU anti trust commissioner says, quoting it out of context, putting your own spin on it and equating that with the rest of the EU. You also seem to be ignoring how MS attained 95% market share in the first place.


(Microsoft attaned 95% share in desktop OSes because Apple didn't compete in the OEM OS space, preferring to charge relatively high prices for Macs, and Unix vendors charged thousands of dollars for their OS and dev toos, and they didn't work on low-end machines. I'm not sure what you think was nefarious about that.)

Having said that, I'll continue. ;)

SReilly, I'm not misinterpreting anything (intentionally or otherwise) at all. Maybe I was too glib.

Here's what I see is going on.
The EC guy wants to bring about what he considers to be a level playing field for competition. He explicitly states that he measures whether the competition playing field is level by measuring marketshare. His theory is one of two things (or both):
1.) If there is a dominant player, then it means that the playing field is not level.
2.) The surest way to bring about a level playing field is to ensure that there's no dominant player.

Do you agree with me so far?

Therefore, in order to bring about a level playing field, he will employ methods designed, not to directly level the playing field, but to bring about a particular marketshare, i.e. one where there is no dominant player, and therefore achieve a level playing field as a result. Do you agree with me on that?

And this is what I have a big problem with. I don't think that a company having a dominant marketshare is evidence in itself that there's not a level playing field. Maybe that company is just better at satisfying the customers. Nor do I think that a company's having a dominant marketshare is evidence enough that either the company should be punished; or that the company shouldn't be punished, per se, but that market requires more government manipulation to bring said marketshare down.

In short, I think that the goal should be to bring about a playing field where all compete, rather than that there no dominant players.

I think this is a difference between European and American mindsets (you're European, I think). While both Europe and the US have used government regulation of business for social good (anti-discrimination laws, anti-polution laws, child-labor regulations, etc), Europe has had a much greater history of using government to manipulate the market itself (Eastern Europe's history with communism, and Western Europe's history with socialism to a much larger degree than in the US). Given that history, Europe more readily accepts the idea of government dictating what goes on in a market.

I've read that US antitrust laws are about helping the consumer while EU antitrust laws are about helping the competition. There is a subtle difference here. US antitrust law is based on the theory that a competitive market leads to higher quality and/or lower prices, which helps the consumer. But once remedies are in place to level the playing field, it's up to the competitors to make use of that level playing field, and if they can't, too bad. European antitrust law is based on the theory that healthy competition is a good in and of itself, and government's role is to help competitors, regardless of whether such intervention helps the consumers (e.g the government-mandated XP-N that consumers simply don't want and never called for), or even to the (unintended) detriment of consumers (e.g. if EU banned XP altogether and only allowed XP-N to be sold in Europe, it would be to the detriment of consumers (due to the inconvenience for them) for the purpose of helping competing OSes (that would be able to trumpet the fact that they ship with a media player but Windows doesn't) or helping competing media players (regardless of the fact that Microsoft and Real have already settled their differences, which were at that heart of the WMP case)).

Another difference between the European mindset and the American one, is that I read at arstechnica, that there's an EU law that says that if a company achieves greater than 40% of a market, then it must start helping its competitors (through bundling, advertising, etc). Such a notion is laughable in the US.

Both EU and US law are about a vibrant market, but the priorities and the way they go about achieving it are different.

Edited 2007-09-18 18:19

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