Law & Disorder / Civilization & Discontents

The eternal antitrust case: Microsoft versus the world


It's off to Europe we go

Was this an ominous defeat for free and fair competition on the software market? Was it the vindication of a company whose only real sin was success? Ten years later, it's hard to come to categorical conclusions about the matter, because the Microsoft antitrust case has never really ended. Like the "Jarndyce versus Jarndyce" legal affair in Charles Dickens' novel Bleak House, it just keeps plodding along.

As Microsoft antitrust fervor cooled down in the United States, it boiled to the brim in Europe. In March of 2004 the European Union hit the company with a €497 million fine, concluding that Microsoft had abused its monopoly position against RealNetwork's RealAudio player. Europe also told Microsoft to release a version of Windows XP without Windows Media Player (the "Windows XP N" as it came to be called), and to provide more technical documentation for its Windows Server protocols.

Two years later the EU ruled that Microsoft had not complied with that last requirement, opening the door for more fines. The organization's European Commission insisted that licensing Windows Server source code wasn't enough. A clear explanation of the protocols had to be released as well. It wasn't until October of 2007 that the EU reached an acceptable compromise with Microsoft on the Windows Server question.

But no sooner did the dust settle on that dispute, then the Union announced a brand-new probe of the company's interoperability standards for its Office 2007 suite. Its Commission also promised to investigate a complaint from Norwegian browser maker Opera. The developer accused Microsoft of illegally tying Internet Explorer to Windows and not adhering to "fundamental and open" standards for how Web browsers render pages. The complaint asked the EC to require Microsoft to offer versions of Windows sans Internet Explorer.


By January of 2009, the EU was calling the inclusion of IE in Windows a violation of the organization's antitrust laws. "Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice," the organization charged.

"The 800-pound gorilla here, of course, is Firefox, with its worldwide market share hovering in the 20 percent range," we noted at the time. But "if Microsoft unbundles Windows and Internet Explorer, how do you get on the Internet to get another browser?"

In early June of that year, Microsoft announced its solution to that problem. It would ship to Europe a special version of Windows 7 without Internet Explorer 8. "The E versions of Windows 7 will include all the features and functionality of Windows 7 in the rest of the world, other than browsing with Internet Explorer," Microsoft explained. "Computer manufacturers will be able to add any browser they want to their Windows 7 machines, including Internet Explorer, so European consumers who purchase new PCs will be able to access the Internet without any problem."

But even this did not satisfy the EU, which a day later announced that it would continue to pursue its antitrust investigation. "In terms of potential remedies if the Commission were to find that Microsoft had committed an abuse, the Commission has suggested that consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all," the Union opined.

As of this year, the solution is a browser ballot.

The browser ballot

"The ballot itself will be distributed to EU customers running Windows XP, Windows Vista, and Windows 7, via Windows Update," we noted in February. "Installing the update will, on Windows 7, unpin the IE icon from the taskbar, and then offer a selection of browsers. The five leading browsers—Safari, Chrome, Firefox, Opera, and Internet Explorer—will be visible on the main selection screen, along with a further seven accessible by scrolling to the right."

Back in the USA

Meanwhile, in the United States, the Department of Justice grappled with a different question: how long should the government continue to oversee and enforce its Final Judgment?

The Bush administration's DoJ clearly wanted out of the job, and announced as much in October of 2007. But that was a little more than a year before a presidential election, which brought in the Obama team. The new regime was more sympathetic to the attorneys general of a handful of states and the District of Columbia, who argued that without continued enforcement of the Final Judgment, Microsoft would revert back to its old ways.

"When the remedial regime imposed by the Court expires in large part in November 2007, the principal constraint on Microsoft's ability to abuse its market power will be gone," they wrote to the DoJ in late August 2007. "There is no way of knowing whether Microsoft will continue to refrain from engaging in the anticompetitive conduct enjoined by the Final Judgment once it has expired and plaintiffs are no longer able to enforce it."

And despite the Final Judgment, Microsoft has not adequately documented its protocols, they charged in October, and no major PC maker distributes a browser other than Microsoft's Internet Explorer.

"Many new middleware technologies are just now appearing that may, in the near future, pose a competitive threat to Microsoft’s operating system monopoly. These technologies substantially depend upon the browser. Because Microsoft still retains control of the OEM channel for browser distribution, in part because its illegal conduct with respect to IE has not yet been fully remedied, it is critical that [various sections] of the Modified Final Judgment be continued until these technologies mature."

Responsive to these appeals, Obama's DoJ hit the ground running in January with an extension on the Final Judgment, citing server protocol documentation that had only been partially released long after a 2003 deadline. The Justice Department then asked the judge in charge of the case, Colleen Kollar-Kotelly, for additional oversight through 2011.

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