Perspective: New Vistas for Microsoft--so why not Europe?

In the wake of Europe's latest and most amusing action against Microsoft--a new fine of $357 million levied by the European Commission because it doesn't like the way the software giant opened up its source code in response to the Commission's antitrust decree--the company has unveiled new operating principles for its software design.

These principles, which are to be reflected in next year's scheduled launch of Vista (the next version of Windows), emphasize flexibility, easy interoperability with other manufacturers' products, innovation and market choice.

What's really new here? Not much. Microsoft has been accused--not just in Europe--of bludgeoning its way to the top of the software universe by using proprietary code and savvy marketing tie-ins to head off not just other operating systems but also add-on software products that could compete with Microsoft's own versions. Its allegedly anticompetitive bundling of Internet Explorer into Windows, for example, was a major focus of the EC's antitrust complaint and, indeed, Microsoft dutifully complied with Europe's unbundling order. The result is the marketing of a Euro-special version of Windows, sans browser, that no one in the world actually wants to purchase.

It's unclear why bundling is fine for some types of manufactured goods but not others.

Why should they? While it certainly helps Microsoft to have IE as a built-in default browser pre-installed on personal computers--on the theory that lazy users won't look any further for their browser needs--nothing stops those users from installing another browser if they wish. The inclusion of Internet Explorer is a cost benefit for consumers.

In terms of competition theory, it's unclear why bundling is fine for some types of manufactured goods (automobiles don't have to be sold with the seats, radios and navigation systems stripped out to enhance competition, for example) but not others (software pre-installed on computers).

Europe no doubt wants credit for Microsoft's new operating principles because EC authorities think their fly-swats at Microsoft have revolutionized the technological landscape. Earlier this year, EC Competition Commissioner Neelie Kroes told Microsoft that Europe expects Vista to be created "in line with the European competition laws...It would be rather stupid to design something that is not."

So now Europe, not exactly the leader of the pack in today's global economy, wants to take on the task of designing tomorrow's software products. Perhaps the inter-Europe alliance that created the Concorde, the late, lamented, supersonic transport that failed every test of market success, could take on this vital new task.

To think that such rhetoric is actually driving the software market is like believing the sun rises just because the rooster crows.

Seriously, no one should doubt that Microsoft has an eye to its political situation (not just in Europe) when it designs and markets products--why incur legal costs you don't need to? At the same time, it's ridiculous to think the world's leading software company would engineer its revamped platform for the benefit of "competition policy" rather than for the benefit of consumers.

Microsoft knows as well as anyone that the exponential growth of the PC market and of Internet usage has greatly transformed its consumer base: More people want more options, more flexibility, and the power to create and explore new market niches. By definition, this new consumer demands products that are less top-down in terms of engineering and more responsive to the particular needs of each individual user--more customizable, as it were.

That this new market profile may coincide with some rhetorical flourishes from European authorities is interesting and amusing. But to think that such rhetoric is actually driving the software market is like believing the sun rises just because the rooster crows.

Europe is a spectator of the software scene (albeit a particularly annoying one), skimming a little money off the top with its antitrust fines while pretending to stand up for European technological might. It's a pleasant bit of theater, but don't confuse it with the real world.

Biography
George A. Pieler is senior research fellow at the Institute for Policy Innovation.

More Perspectives

[anthonybennis]

Great Article

Great article. I especially like the sweeping* misleading generalisations against "Europe", topped off with just the right amount of arrogance.

[anthonybennis]

Great Article

Great article. I especially like the sweeping misleading generalisations against "Europe", topped off with just the right amount of arrogance.

Wow, somebody has a grudge against europe

I must say that I do not quite get one
paragraph:

Europe no doubt wants credit for Microsoft's
new operating principles, because EC authorities
think their fly-swats at Microsoft have
revolutionized the technological landscape.
Earlier this year, EC Competition Commissioner
Neelie Kroes told Microsoft that Europe expects
Vista to be created "in line with the European
competition laws...It would be rather stupid to
design something that is not."


If Microsoft would like to do business in
Europe, they are bound by the laws of europe. (I
think that part is without controversy. Now
Microsoft was found to be in conflict with said
laws with previous versions of windows. I
interpret the quote by Ms. Kroes as to mean,
that Microsoft will take the laws of europe into
account when creating vista, so that they will
save a lot of trouble later.

What does that have to do with "revolutionizing
the technological landscape"?



I also like that part:"while pretending to stand
up for European technological might". Hmm..lets
see who some of the complainants are in europe:
IBM, Oracle, Sun, Real Networks....yes it seems
only failing european companies....

[kjpweb006]

On microsoft's payroll?

This article was offensive and ignorant on so many levels.
Arrogant and condenscenting on Europe - that the author more than obviously has no clue about - his article could read like a Microsoft press statement.
Not only that is choice of comparisons is as unlucky as the entire rest.
Yes - as a matter of fact - I'd like to see competition in the Car Stereo/GPS market.
Manufacturers offer overprized electronics, that don't hold the water against what's available in the open market - both what pricing and performance is concerned and protecting this obviously profitable area by applying custom setups.
And what the Browser issue is concerned - it is a fact that the basic user doesn't switch, because of the lack of know how and Microsoft builds on that. Despite the common knowledge - that IE trails in both performance and security both Firefox and Opera by a mile - and so far IE7 wasn't able to catch up significantly.
So what is the authors motivation to write such an article that is not only factually incorrect but taking Microsoft's stand on an issue that US Courts already have decided not to be kosher?

[Jon N.]

OK, but...

Lets see here. I.E. is the source of the lawsuit in Europe? I don't think so. I think it's a bad browser that was never constructed correctly, with a worldwide displeasure of it, and a egocentric EU trying to make a name for itself by serving this lawsuit & imposing these fines. How will Europeans get their Windows updates without I.E.? What about the twenty to thirty percent of the websites and pages on the WWW that work only with I.E.? Some companies like Computer Associates require I.E. as a recepticle for their Firewall & Anti-Virus suites! What about that? How will all that money that the EU gets over this lawsuit, change the problems that still exist? How many times are the EU gonna drop the ball? I knew the EU was in trouble financially when they went after Microshaft over this nonsense. We all should know by now, how Microshaft either absorbs the competition by buying it outright, or how it sues its competition into the dust. The EU lawsuit never addresses this. Now the EU cyber-community will have to download I.E. as a separate item, instead of it being pre-installed. Like that's gonna help! What a grand waste of time for the EU cyber-community! Everyone should know by now, that Microshaft's I.E. is junk. Do they need it to be a separate download to emphasize it? If Firefox could download and install these MS/Windows updates, then maybe the EU lawsuit would have some merit. Unfortunately, until browsers like Firefox, Opera, etc. are able to download and install the MS/Windows updates, then their point is mute, and the lawsuit is just EU ego-stroking. The EU let's loose a paper tiger, and Microshaft lights a match! LOL!

[aurora7795]

I agree with you

I'm a European (UK), Mac user but I do agree with you on a lot of
stuff in your article. Why should Microsoft be grilled for bundling
software? It doesn't mean people have to use it. When I use
Windows, I often use Firefox instead of IE and iTunes in stead of
Windows Media Player. Both were free and easy to install on a
Windows machine.

I think Europe is frustrated that a U.S. company make the world's
most used OS but why should Microsoft feel guilty for being
successful? I don't think Windows is the world's best OS, I chose
to Switch to Mac OS X but only when Apple released an Intel
machine that would allow to use Windows as well when I need
to.

Microsoft can be criticised for not using open-standards but
complaining because they give you free stuff with your copy of
Windows seems a bit lame.

[stumiller]

are you an idot?

What the author clearly fails to see when he says "automobiles don't have to be sold with the seats, radios and navigation systems stripped out to enhance competition, for example", is that an automobile is not complete without these things. You cannot drive a car without seats. But you CAN order one without a radio. Why MSFT is anti-competitive is because it bundles software NOT NEEDED in an Operating System (underlying software used to make the hardware all work together and allow other software to access the hardware), when there are more popular (often commercial) alternatives out there.

What's worse, is that although these "features" appear to be free, the price of a Windows OS grows each release. You find this acceptable behavior?

[maccam]

Low expectations

The author, being a lawyer by trade, seems to demonstrate to us
that it is all about crafted, persuasive prose, rather than
accuracy.

My understanding is that bundling is not a monopoly issue if no
independent market exists for the feature being bundled. IE was
an issue because various an independent market for browsers
existed. Various PC suppliers (in the US case) were "persuaded"
to forgo Netscape -- that was the one of the instances of
monopoly-position abuse.

As for the tech knowhow, try removing IE, then try to use the
software update service to patch/update the OS. You will find it
difficult indeed.

[lmsoren]

Wuht's for dinnah, Maw?

Great article for someone who's obviously never sat foot outside his Alabama backwater trailerpark...Perhaps a trip across the pond might help that vaguely repressed anger against Europe.

[Arrgster]

Car seats are a stupid example

To own and operate a car you need to have a seat to sit in, therefore it is a necessary part of the car. The car seat was not added to put other car seat makers out of business.

To own and operate a OS you do not need a web browser built in, just like you don't need MS office built in. If I were to follow your theory then MS should bundle every app know to man because it somehow has something to do with running a computer. Lets call a spade a spade here. MS bundled IE to put Netscape out of business, which is exactly what happened. Now they have taken it a step further and developed certain aspects of using their OS to depend on IE to ensure its dominance. Good business move? probably. Legal? hard to say. Good for innovation? definitely not. good for the end user? In the long run no, short run, sometimes.

[pdluk]

Another one crawls out of the woodwork

It's funny (and not in a good way) that virtually every continent on the planet (including North America) has found Microsoft guilty of misconduct with regard to their operating system monopoly yet there is never a shortage of Americans like this guy who have the audacity to stand up and say the rest of the world is wrong. I'd love to hear the author's opinion on why a criminal shouldn't be punished if they break the law. Perhaps he'd feel differently if he were on the receiving end of illegal corporate behaviour rather than the receiving end of a corporate criminal's cheque book?

[se7ener]

Senior policy innovator?

George ought to carefully consider the tone of his statements when drafting these kinds of articles. It does nobody any good to ridicule and lambast for the sake of it. Stick to the facts, make your point and you'll find the vast majority agree with the basic tennets.

"Europe not exactly the leader of the pack" etc is unbecoming of a senior fellow is it not? To go on and refer to Concorde as a failure in the market is just waving a red rag. Let's get more up to date and discuss Airbus and Boeing shall we?

I suspect many enjoy a love hate relationship with Microsoft, but then some of us remember for example the days when we had to go through lengthy conversions when a business partner was using Wordperfect of Lotus WordPro etc. Sadly they are tiny now, but the interoperability on a global scale has, it must be conceded, helped us all. Sure the EU's meddling really is of no help to anyone, but then I'd make a further point. It seems to me that most Americans view Europe as a homogenous group, and the Europeans have a similar view of America. Then we note that in America sales tax varies from state to state, you can buy guns in some places and not others, you can be executed in one place and not another, all fairly significant differences between the states' legislative systems. And yet Americans still believe that something the EU says will be applied unilaterally across this thing called Europe?

Time you got on an Airbus and came over to see what it's really like!

Andrew

[spike56532]

Pot & Kettle

Both entity's, in this article, Microsoft and the EU, are arrogant and condesending, and so is the author of the article......., do three wrongs ,make a right? The entire situation ( and article ) is/are rediculous.Windows is a product, buy it or don't.

[Aliendreams]

narrow minded article

For a "Senior Fellow" in the "Institute for Policy Innovation" this article does seem a little narrow-minded and partial.

First, why wouldn't anyone "in the world actually want to purchase" a copy of the OS without a browser? It may seem weird, but if I'm buying an OS, all I want is an OS. I can choose later my browser. The growing relevance of browsers such as Firefox counter the opinion that users are just too lazy to go and fetch their own applications. That's like evaluating everyone by the lowest denominator - which is, in pratice, what the much-hyped "user friendliness" of Microsoft is all about. Yes, there are lots of users (perhaps the majority) who, for now, don't really care what they use and stick with what comes in the package - not that its particularly good, but they just don't know anything else, on most cases. But the point is, IE wouldn't be the #1 browser if it had to compete with other browsers on the same terms (that is, not attached to the OS). So, not much as a "benefit" for the users, but more like an intelligent(??) way to keep a product that's not that good (it doesn't need to be) as #1 by artificial means (attached to the OS).

The analogy with the automobile industry is just too far-off and almost moronic. Seats, for instance, are a vital part of the automobile, unlike a browser in any OS. IE would be more like the cd player, at most, if such type of comparisons are really called for, which I believe are not.

Other than that, most comments and opinions stated on the article about Europe show little but prejudice on the part of the author. Of course the EU expects Microsoft's desing for Vista to comply with European laws. Don't the US want Vista to comply with their laws? Doesn't any country wants that? Not because the EU wants "part of Microsoft's credit", thank you very much, but we've plenty more to credit ourselves without having to jump into anyone else's user-friendly bandwagon. You could turn this argument around and say Microsoft expected to change EU's laws on competition - or maybe just that EU would turn a blind eye on their products, allowing them to disregard our laws?

Microsoft has lots of dollar power. Don't mistake it with innovation. And as to Europe, try to learn a bit more behind the american news headlines.

[superpp3]

Different view on monopolistic practices

I think that Microsoft is abusing its position, by bundling software. But I have a different point of view.

I don´t mind an operating system that comes with IE or Mozilla preinstalled, or even office software. The problem is that MS is creating these apps. only for Micorosoft Windows operating systems. If there was a version of MS Office, and Internet Explorer for Linux, the operating system, Windows, wouldn´t be installed in 90% of the personal computers. Windows probably wouldn´t hold itself, without the help of the exclusivity of these MS apps.

I don´t really understand why all the lawsuits are chasing MS Windows, instead of all the other (MS and other companies) applications that only run on "selected" operating systems.

[imacpwr]

This guy's an obvious M$ employee..

nuff said.

[Bart B. Van Bockstaele]

I essentially agree

The example of the car seats isn't the brightest one, but the reasoning is right on.

The European Union has actively stimulated Microsoft and actively boycotted others in order to allow Microsoft to become a monster. They should not now complain about it.

While I have always combatted Microsoft, I now feel an urge to defend it, because what the Union has done and is doing is simply revolting.

Greetings from 060825-0301 18C Toronto

[ArnaudVRe]

wait wait please

Quote: "Europe is a spectator of the software scene (albeit a particularly annoying one), skimming a little money off the top with its antitrust fines while pretending to stand up for European technological might. It's a pleasant bit of theater, but don't confuse it with the real world."

Microsoft has what I believe to be a great OS today as well as a great suit of applications but I don't believe that a good result can justify the way in which it is achieved. Lets also please not forget that the telephone was invented in Edinburgh, Scotland and that the Linux kernel was written in Helsinki, Finland not to mention the WWW invented in Switzerland by an Englishman so please spare us the comment about "a bit of theater." Also to go right back, let me remind you that the early US scientific minds were educated in Europe before there was even a ship yard in the states. Peace.

[valdealge]

I?m not an MD but in my lay opinion the chromosome count should be verified

Mr. Peeler is like mo$t making a table dance, a Micro$oft table dance. Concerning his ignorance self-statement I think that?s a concern for his educators, concerning his impoliteness his Parents are to blame, concerning his position in that unknown Institute I hope it does not mirror the said Institute Policy and Quality, concerning his seniority ? well the photo says it all.

Kindest Regards from E.U.

[squirri]

What an arrogant(and ignorant) article

Mr Pieler at least ought to get his facts right

I think he will find that the GDP of the EU exceeds that of the US

His perception of the history of how IE camer to dominate is
questionable to say the least. The generally held view is that MS
used its muscle in the early days of the Internet to bury what
was then a better browser - Netscape Navigator. Because MS had
the finacial muscle, it obliterated what was then a better product
(which was being charged for) by binding its product so tightly
with the OS.

Even today it abuses it's position in forcing us to user its
vilnerability ridden browser to update its vulnerability ridden
opeating systems.

I hve often defended the US position on foreign affairs, but this
article is an excellent example of why America is held in such
low esteem in today's world. This attitude of 'you do what we
want or else' simply won't play in the real world.

A common jibe about America is always late, always wrong,
always insensitive and always domineering. The screams of self
righteous outrage outrage when someone deploys their own
tactics against them(someone mentioned Airbus and Boeing) are
a source of constant amusement. On a related theme, the open
skys debate seems to be at the point where the US demands
total access to the EU market whilst excluding g foriegn carriers
from its domestic airspace. Or the US refusal to ratify
extradition treaties(which it is currently making very
questionable use of) because it might offend a large chunk of
domestic voters who think that blowing up innocent citizens in
Northern Ireland is patriotic.

People like Mr Pieler do the American cause absolutely no good
at all - if this is what is regarded as the norm for 'Senior' opinion
formers in the US then heaven help us all(and you btw)

The Eurocrats are also pathetic - some of the stuff that comes
out of Brussles is just unbelievably stupid and we have,
arguably, the most insane and expensive agricultural system in
the world.

A plague on both your houses