Microsoft under the EU gun again, this time for abusing its IE and Office positions

Microsoft desperately needs some European friends. Fresh from its first defeat in Europe, the American software giant is under the gun again from the European Commission. The stakes are much higher this time around, and the focus much more pertinent to true Microsoft monopoly power.

Microsoft got hit by a $734 million fine the last time around for preventing interoperability with Sun's computers and for bundling its media player. This time, Microsoft's Office file formats and its bundling of Internet Explorer with Windows are under fire. The EU's favorite whipping boy is almost certain to end up coughing up a lot more cash this time:

The new probes focus on two areas that are dear to Microsoft: its Web browser, Internet Explorer; and its software suite, Office. The EU is examining whether Microsoft harms alternative browser vendors by packaging Internet Explorer with its ubiquitous Windows operating system and whether it harms other office-suite vendors by controlling the file format used to store office documents.

I've noted before that I'm not a big fan of competition by law or regulation. This is no different. I am glad, however, to see that the real sources of Microsoft's dominance - IE and Office - are finally getting scrutiny. Whatever the fine the EU eventually levies against Microsoft won't matter much to the cash-rich company. A financial setback is temporary.

But regulation? Ah, that is eternal. And unlike in the US where one can be convicted of abusing monopoly power and then let go scot-free, it's more likely that the EU will tenaciously cling to Microsoft until the company at least pretends to change. We'll see.