The chief complainant in the European browser case against Microsoft says that the move to strip Internet Explorer out of Windows 7 in Europe is an insufficient step that won't lead to better competition in the browser market.
In an interview, Opera Chief Technology Officer Hakon Wium Lie said that with regulators threatening action, Microsoft was under pressure to do something, but said that its choice wasn't what Opera was looking for. Lie told CNET that Opera wants people to have access to more browsers, not fewer.
Hakon Wium Lie
(Credit: Opera)"I don't believe this is going to restore competition in the marketplace," he said.
Instead, Lie favors a proposal that the European regulators have been considering that would require users to be given a choice to download one or more browsers the first time they access the Internet.
"We would like to give users a genuine choice," Lie said. The remedy that the EC has been discussing, a so-called "must-carry" remedy, would be a better solution, he said.
Microsoft acknowledged in a blog posting that regulators could still force that to happen.
"Our decision to only offer IE separately from Windows 7 in Europe cannot, of course, preclude the possibility of alternative approaches emerging through Commission processes," Deputy General Counsel Dave Heiner said in the blog.
But Heinen said that Microsoft believes its move puts it in compliance with European law.
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"We believe that this new approach, while not our first choice, is the best path forward given the ongoing legal case in Europe," he wrote. "It will address the 'bundling' claim while providing European consumers with access to the full range of Windows 7 benefits that will be available in the rest of the world."
For his part, Lie said it is a solution that won't fundamentally change anything, as was the case when the company issued a version of Windows in Europe with the Media Player removed.
"They are under pressure to do something and they come up with this thing, which is quite obviously not going to work," he said. "This is very similar to what the remedy was in the Media Player case. It was widely recognized that that was an insufficient remedy. It was too little too late."
By removing the browser, Microsoft won't make life any easier for Opera, which still needs to find a way to get its browser on to computers. It could theoretically now strike a deal with PC makers to get Opera included in place of Internet Explorer, but of Microsoft's rivals, only Google seems likely to have that kind of money. Lie said his company definitely does not.
"Certainly, we are in no financial situation to pay lots of money to have Opera distributed on new PCs," he said.
The situation is even more precarious for those upgrading existing machines to Windows 7. In that case they get a PC with no browser at all. Microsoft will make lots of CDs that will give users IE 8 if they want, but Opera and rivals have no easy way to get on those machines, short of following Microsoft's approach.
Lie also objected to the fact Microsoft is only making the move in Europe.
"It's Europe only," he said. "We're looking for more than that. We want the whole world to have better access to better browsers."
Microsoft met a deadline this week to respond to European Commission charges that its inclusion of a browser in Windows violates antitrust laws there.
In January, the European authorities filed a new complaint with a preliminary finding that Microsoft had broken the law by bundling a browser into Windows.
Microsoft's response was not made public and the company did not offer a comment, but it's fair to say the company disagrees with the finding.
The stakes are high. In addition to potential fines, Microsoft has noted in regulatory filings that European authorities may seek to force Microsoft to include rival browsers with Windows as well as forcing the company to disable parts of Internet Explorer for users who select a different browser.
In other Microsoft news, the company has hired Cyrus Krohn as director of online services programming, a new position reporting to MSN executive producer Scott Moore. He will start on May 4, Microsoft said.
Most recently, Krohn served as director of the eCampaign division for the Republican National Committee and was at Yahoo from 2005 to 2007. Krohn also worked at Microsoft from 1996 to 2005 in various capacities, including as publisher of the online magazine Slate.
Meanwhile, as noted by CNET colleague Jessica Dolcourt, Microsoft has started talking about a new version of its Tellme program for Windows Mobile. Microsoft is counting on Tellme's voice technology to help make its upcoming release of Windows Mobile 6.5 a more compelling experience.
The software is available now for phone makers to start including in their devices and will be available this fall for consumers to download.
The European Union is considering forcing Microsoft to distribute rival browsers as part of Windows, the software maker disclosed in a regulatory filing this week.
As part of its quarterly filing with the Securities and Exchange Commission filed on Thursday, the software maker offered more details on the EU's statement last week that it believes Microsoft's inclusion of a browser in Windows violates antitrust law.
Microsoft said that the EU is considering forcing computer makers, known as original equipment manufacturers, or OEMs, to offer multiple browsers with new Windows PCs.
"While computer users and OEMs are already free to run any Web browsing software on Windows, the commission is considering ordering Microsoft and OEMs to obligate users to choose a particular browser when setting up a new PC," Microsoft said in the SEC filing. "Such a remedy might include a requirement that OEMs distribute multiple browsers on new Windows-based PCs. We may also be required to disable certain unspecified Internet Explorer software code if a user chooses a competing browser."
Microsoft also noted that the EU is also seeking to "impose a significant fine based on sales of Windows operating systems in the European Union."
The company reiterated that it will have the opportunity to respond in writing in the next two months and, after that, could also request a hearing.
And that's not the only area where Microsoft faces further EU action. Microsoft confirmed that an investigation into Office may still be ongoing.
"In January 2008, the commission opened an additional competition law investigation that relates primarily to interoperability with respect to our Microsoft Office family of products," Microsoft said. "This investigation resulted from complaints filed with the commission by a trade association of Microsoft's competitors."
In a case of convenient timing, Opera Software's top developer happened to be in CNET's office just after Microsoft disclosed that the European Union has objected to Microsoft's bundling of a Web browser into Windows.
"We think it is right of the EU, for the sake of the consumers, to be concerned about someone potentially misusing their competitive power," Chief Development Officer Christen Krogh told CNET News. The EU action stems from a 2007 complaint by Opera.
Krogh said the Internet is too important for consumer choice to be limited. Developers of software and services, he remarked, shouldn't have to "attach them to something which is proprietary."
The fact that Microsoft's market share has dropped, he said, doesn't ensure that true choice will win out. "There has been more competition before," he said, referring to the Netscape and pre-Netscape days. "Fair competition does not necessarily prevail. We still think whenever a platform has a sufficiently high market share, it should be open and easy for consumers to choose their component to access the Internet."
Even if IE's market share drops to below 60 percent in Europe, Krogh said, "we think that is sufficiently high to be concerned."
Krogh's comments were echoed by other Opera executives in a statement provided by the company.
"On behalf of all Internet users, we commend the Commission for taking the next step towards restoring competition in a market that Microsoft has strangled for more than a decade, wrote Jon von Tetzchner, Opera's CEO. "The Commission's Statement of Objections demonstrates that the Commission is serious about getting Microsoft to start competing on the merits in the browser market and letting consumers have a real choice of Internet browsers."
Opera noted that it follows the same principles applied by the EU in 2004, when it held that Microsoft could not tie its media player to Windows and ordered the software maker to offer a version with the media player stripped out.
"The Court of First Instance's judgment was clear that Microsoft illegally tied Media Player to Windows," said Jason Hoida, deputy general counsel at Opera. "We are not surprised that the Commission has issued a Statement of Objections based on the principles in that judgment. We are confident that the Commission will ultimately conclude that Microsoft has violated European competition law again and that it will take all necessary actions to restore competition and consumer choice in this important market."
The European Union's new complaint against Microsoft really takes one back. Like, a decade or so.
Its objection--that bundling a browser into the operating system violates antitrust law--is the same one that U.S. regulators raised in 1996.
The newest allegations stem from a 2007 complaint by Norway's Opera that Microsoft was hurting competition by including Internet Explorer in Windows and by not better adhering to Web standards.
What is most odd about the EU taking up the issue is its timing. The EU spent years going after Microsoft on antitrust matters related specifically to its bundling of products with Windows and didn't focus on the browser. Plus, the move comes as Microsoft's browser share is at its lowest point since the Netscape days.
Firefox is particularly strong in Europe, the area over which the EU has oversight. According to XitiMonitor, IE had a 59.5 percent share in Europe as of November, compared with 31.1 percent for Firefox. Opera had about 5 percent, and Safari half of that. Microsoft lost a full 5 percentage points of market share since April alone.
That doesn't mean that Microsoft will have an easy time in Brussels. As it has shown in the past, the EU is willing to take a tough line with Microsoft, and it is not averse to fining the company and issuing harsh decrees.
David Anderson, an antitrust attorney and partner with Berwin Leighton Paisner in Brussels, said that Microsoft may well face a challenge ahead in persuading the Commission to set aside its preliminary assessment, saying the commission tends to review matters thoroughly before issuing such "statements of objections."
Further he noted that the commission staff may feel emboldened after having won its previous case against Microsoft. It also has the same set of attorneys that worked on that case pursuing the IE issue, Anderson said.
Microsoft is choosing its words carefully at this point, electing not to go beyond a statement that is more procedural than confrontational. But I can only imagine the words being used behind closed doors in Redmond.
In defending itself, Microsoft will find itself against one particularly familiar foe. Opera's chairman, William Raduchel, is a longtime Microsoft critic, dating back to his time at Sun Microsystems, which brought antitrust actions of its own against Microsoft before eventually settling.
For those who need a refresher course in the browser wars, Netscape had the dominant program in the Web's early days, controlling more than half the market as late as 1997. By 1999, though, Microsoft's IE had more than three-fourths of the market.
It has held the dominant position ever since, accounting for greater than 90 percent of the market through 2004, when Firefox began to make serious inroads. Its share has been on the decline since, according to Net Applications.
Microsoft's browser had an 87 percent share in 2005, but by 2007, its share had dropped to 79 percent. Last year alone, IE's market share dropped from 75 percent in January to 68 percent by December.
CNET News' Dawn Kawamoto contributed to this report.
LAS VEGAS--Mozilla Vice President Mike Schroepfer said Microsoft's decision to support a more standards-compliant mode by default should keep Web developers from having to waste so much time.
With the current set-up, he said that developers have a fairly easy time getting a site that renders properly in Opera, Safari, and Firefox, but often spend a lot of energy trying to get that same site to also render correctly in Internet Explorer.
"Web developers burn through a tremendous amount of time getting their sites to work with IE because of IE's special quirks," said Schroepfer, who I caught up with here at Mix '08.
He said that Microsoft's move toward greater embrace of standards with Internet Explorer 8 is a good thing.
"There are some encouraging things there and I hope to see more," he said.
In particular, it would be helpful if Microsoft gave a roadmap for which standards it planned to support down the road, that way Web developers could decide earlier to invest time. He said he would really like to see Microsoft support a new graphics standard known as scalable vector graphics.
"That would be a great win for the Web," he said.
Meanwhile, Schroepfer also talked up the benefits of Firefox 3, which is just hitting its fourth beta and is edging closer to a final release. In particular, he pointed to the browser's "Awesome bar" that remembers not only specific Web addresses that have been visited but also other information from the page. For example typing in "televisions" might bring up a recent TV search on Amazon, even though television wasn't in the address.
"Once you use it you actually can't use any other browser," he said. Also on tap are improved speed and antimalware features, he said.
Updated at 2:30 p.m. PST.
LAS VEGAS--Although anyone can now download the Internet Explorer 8 browser, Microsoft is gearing this release for Web developers. However, a second beta, slated to arrive this summer, is aimed at a wider audience, Microsoft's top browser executive told CNET News.com.
"It's public," general manager Dean Hachamovitch said of the Beta 1 released Wednesday. "It's out on Microsoft.com somewhere. Anyone can download it."
Although features like Web Slices may appeal to consumers, Hachamovitch said that "the (current) beta really is for developers."
Microsoft isn't saying when the final version of the browser will be released. Hachamovitch also declined to say whether it will be released at the same time as Windows 7, the next version of Microsoft's operating system. He did note that Microsoft released IE 7 for XP ahead of Windows Vista, so it is technically possible to do so.
As was the case with the IE 7 betas, those installing the test version of IE 8 will have to replace their current browser.
The IE 8 beta will run on both 64-bit and 32-bit versions of Windows Vista and Windows Vista SP1 as well as Windows XP Service Pack 2 and Windows Server 2003 and 2008.
In designing the browser, Hachamovitch said, Microsoft is trying to find ways to both be more compatible and add features. On that latter front, he pointed to a consumer feature known as activities, which allows users to select a block of text and have it, say, looked up on Dictionary.com or mapped with Microsoft or Google's services.
"Right now, the Web for a lot of people is 'some assembly required,'" he said. "This integrates the services you use with the sites you visit."
LAS VEGAS--Microsoft offered its first public demonstration of Internet Explorer 8 on Wednesday, a prospect that had general manager Dean Hachamovitch struggling to figure out what to cover.
"I'm so excited that I had to figure out how to focus," he told the crowd. The marketing folks naturally suggested he point to three major advances, but Hatchamovitch disagreed.
"These are developers," he said he told the marketers. "They can count higher than three."
So, instead he said he would talk about eight features: CSS 2.1 support, CSS Certification, performance, start of HTML 5 support, new developer tools, activities, Web slices and one he hasn't named yet.
Microsoft also said that the first beta of the browser, intended for developers, will be available after today's keynote.
One of the new features, WebSlices, allow users to break a Web site into parts and only get updates from the part they want.
In IE 8 users can subscribe to parts of Web page," Hachamovitch said. He showed an example in IE 8 where users can use Web slices to subscribe to a single eBay auction.
Apple has its own Web-clipping subscription method that is part of Mac OS X.
Separately, Microsoft said it was making available a beta version of Silverlight 2, which will move the technology further beyond delivering video and into creating rich Internet applications.
Among the features of Silverlight 2 is what Microsoft calls adaptive streaming: the ability of the client PC to decide how large a streaming file it can handle at any given moment based on its CPU and network resources.
"If the network gets congested it can drop down to a lower bit rate," said Scott Guthrie a vice president in Microsoft's developer division.
With IE8, Hachamovitch discussed Microsoft's commitment to compatibility. He relayed a story of what his kids used to say whenever they had Internet problems.
"They'd ask 'Daddy, did you break the web?'" Hachamovitch said. "Most of the time I could honestly say 'No.'"
In a broader sense though, Hachamovitch said, that others might disagree that Microsoft, had in fact broken the Web. "Web developers might answer the question differently," he said.
Hachamovitch then went on to talk about Microsoft's commitment to interoperability and steps that it has taken. Microsoft announced earlier this week that IE 8 would use its most standards compliant mode by default. The company said it believed that move would assuage developer concerns as well as regulatory and competitive issues.
However, a top Opera executive told CNET News.com yesterday that Microsoft's move addresses only one of several concerns that the browser maker had raised with the European Commission.
Aiming to demonstrate that its commitment to interoperability goes beyond fancy statements, Microsoft said Monday that it is shifting its plans for the next version of Internet Explorer to make the program more friendly to Web standards.
The software maker said that a planned standards compatibility mode will now be the default rendering engine when IE 8 makes its debut. Microsoft has already said that the new browser is capable of passing the Acid2 rendering test.
"We think that acting in accordance with principles is important, and IE 8's default is a demonstration of the interoperability principles in action," IE general manager Dean Hachamovitch said in a blog posting.
With IE 8, Microsoft plans to have three rendering modes: the new standards-compliant mode, the IE7 rendering engine, as well as an option for displaying older Web sites. Because of the default shift, Web sites that want IE 8 to use its IE7 engine will have to add a tag to their site's code.
Microsoft noted that there are some legal reasons for changing course. "While we do not believe there are currently any legal requirements that would dictate which rendering mode must be chosen as the default for a given browser, this step clearly removes this question as a potential legal and regulatory issue," Microsoft General Counsel Brad Smith said in a statement.
At the end of last year, Opera complained to the European Commission about Microsoft's browser practices, and last week Microsoft was handed a record fine for its past noncompliance with EU dictates.
Microsoft hasn't said when the final version will be out, but a beta version of the browser is due out in the first half of the year. There also will likely be more browser news later this week, when Hachamovitch gives a keynote speech at the Mix '08 conference in Las Vegas.
Opera's antitrust complaint against Microsoft may be new, but Chairman William Raduchel has been a critic of Microsoft's tactics for some time.
Raduchel was in a top strategy role at Sun Microsystems back in the late 1990s, when that company filed its antitrust suit against Microsoft. And he had some choice things to say about Microsoft at the time, according to quotes rediscovered by Todd Bishop over at the Seattle Post-Intelligencer.
In a 1999 book, High Noon, Raduchel is said to have likened Bill Gates to John Rockefeller, saying each had a sense that they had a "God-given right" to the power they enjoyed. Raduchel left Sun in 1999 to become AOL's chief technology officer.
Sun eventually settled its antitrust case with Microsoft in 2004.
It's interesting to note that Opera is the first big complaint we've heard about since Microsoft accepted the EU's decision. After a U.S. court ruled that Microsoft was a monopoly, a host of private antitrust complaints were filed, including Sun's. Anyone have ideas on who is next to complain to Brussels?
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