Microsoft Says EU Antitrust Deadline Extended

2 Comments

1. 2009-04-16 10:23 pm

   TechGeek

   How about the EU ask Microsoft to respond to charges of them fixing the netbook market. Someone want to speculate why they only sell the high end netbooks with Windows and the low end ones with Linux? Shouldnt I be able to get linux on either since they are essentially the same model? And why did Microsoft limit the amount of ram and screen size of the machines?
• 2009-04-17 3:42 am

  lemur2

  How about the EU ask Microsoft to respond to charges of them fixing the netbook market. Someone want to speculate why they only sell the high end netbooks with Windows and the low end ones with Linux? Shouldnt I be able to get linux on either since they are essentially the same model? And why did Microsoft limit the amount of ram and screen size of the machines?

  Microsoft didn’t limit the amount of ram and screen size of the machines. Microsoft don’t make the machines.

  Instead, Microsoft made XP Home available for an extended period, beyond the point where they had previously said they were no longer going to license any copies of XP, for machines with a limited screen size and amount of ram.

  The anti-trust charge related to that would be predatory pricing … one would have to show that Microsoft “dumped” a product on to a new market at a very low price, in order to kill off a competitor.

  http://en.wikipedia.org/wiki/Predatory_pricing

  “Predatory pricing (also known as destroyer pricing) is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.”

  This wouldn’t seem to be (at first glance) all that difficult to show that Microsoft did this.

  Having said that, however:

  http://en.wikipedia.org/wiki/Predatory_pricing#United_States

  “However, because the antitrust laws are ultimately intended to benefit consumers, and discounting results in at least short-term net benefit to consumers, the U.S. Supreme Court has set high hurdles to antitrust claims based on a predatory pricing theory. The Court requires plaintiffs to show a likelihood that the pricing practices will affect not only rivals but also competition in the market as a whole, in order to establish that there is a substantial probability of success of the attempt to monopolize. If there is a likelihood that market entrants will prevent the predator from recouping its investment through supra competitive pricing, then there is no probability of success and the antitrust claim would fail. In addition, the Court established that for prices to be predatory, they must be below the seller’s cost.”

  Since the development cost of XP Home has long been recouped, Microsoft’s marginal costs are only the cost of the plastic of the CDROMs. Hence, despite the fact that predatory pricing happened, it would seem that in the US at least it was OK (according to the courts) for Microsoft to do that.

  Now, if it could be shown that Microsoft offered predatory prices to OEMs for XP Home on the condition that they didn’t also offer Linux on the same models, then there might be a case.

  I can’t recall the term for this, but it has got to be some sort of anti-competitive inteference with the market.

  Edited 2009-04-17 03:57 UTC