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IT looks like the times they are a-changing for our good friends from Redmond, Washington.
The European Court of First Instance upheld the European Commission's findings that Microsoft abused its dominant position by refusing to make its products operable with those of its rivals and by tying Windows Media Player to the Windows operating system. The court also upheld the $613 million fine imposed. Ouch!
The matter seems to have been before the courts forever. The original ruling by the European Union was made in March 2004. It found that Microsoft had a monopoly position and ordered that it introduce a version of Windows without Windows Media Player. It also imposed the huge fine, but it is likely that Gates and company can handle the payments.
Perhaps the most significant finding was that Microsoft was ordered to open up the interface code that allows other servers to operate with its products. Although the ruling has been upheld by the European Court, we probably haven't heard the end of it yet. Being forced to open up the code could cost Microsoft the world. Well, it could cost it world domination anyway, so the company is bound to fight every single inch of the way.
Microsoft appealed the 2004 judgement claiming that it did not 'serve the interests of consumers'.
And, following the European Court decision, the company's general counsel Brad Smith said that he and other company officials need more time to study the ruling before determining the next steps.
Interestingly, his statement did say that Microsoft is determined to comply with European laws.
'There's obviously a lot of work that has gone into our efforts to comply with the commission's terms with respect to communications protocols and our duty to license them — a duty that obviously was reaffirmed by the court's decision today,' Smith said.
'We've made a lot of progress in that regard, and yet we all have to acknowledge that there are some issues that do remain open.'
But the really interesting thing about this turn of events is how the European ruling is being viewed in the US.
The company's rivals, naturally, applaud the decision calling it a win for the consumer.
The chief executive of Red Hat, one of the largest providers of open source software, Matthew Szulik said: 'The court has confirmed that competition law prevents a monopolist from simply using its control of the market to lock in customers and stifle new competitors.'
RealNetworks, a key benefactor of the 2004 ruling, was also keen to praise the EU decision.
Senior vice president of legal and business affairs and general counsel Bob Kimball said: 'We think the Court of First Instance was right to uphold the European Commission's conclusion that Microsoft cannot use its operating system monopoly to provide its applications with an unfair advantage.
'The standards affirmed by the European Court should help ensure fair competition for all Windows application developers.'
But the Wall Street Journal thinks the EU has got it wrong and might just end up quelling innovation and stifling free enterprise, saying: 'The European Court's ruling marks a giant step backward for consumers and businesses worldwide. While US antitrust law has been increasingly interpreted to protect consumers rather than competitors ... Europe's law has always had a strand that shields less successful firms from dominant rivals.'
Now the court has another dominant technology company in its sights. Intel, the microprocessor company that holds 80 per cent of the global market, is now under investigation for anti-competitive practices.
You cannot help but wonder what the folks at Google, Apple, Adobe and other major technology companies that hold significant market share think about this turn of events. Perhaps they are already taking steps to ensure they do not end up in the European Court's spotlight. I would if I were them.
>>Sherrilynne Starkie is the managing partner of Strive Public Relations, a communications consultancy in the Isle of Man. She provides her views on business and technology each week in Tech Talk. Visit her business blog Strive Notes for frequent updates.
www.strivepr.com
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Saturday 04 February 2012
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