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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

September 17, 2007 at 3:46 PM

Microsoft’s European case: Time for a break?

Finally, the Microsoft antitrust case gets interesting again.

Not because the company lost its appeal and has to pay a big fine. That’s really a snooze. Microsoft paid the fine a long time ago, and it’s been making changes since 2004 to comply with the ruling that it was appealing.

Maybe I’m just enjoying the lull between this ruling and the next round of antitrust complaints here in the U.S., but I’m excited to see this enter the next phase, where we see how Microsoft performs, now that regulators have supposedly balanced the market and removed the unfair advantages that the Redmond company gained from its monopoly.

Microsoft has clarity and its competitors supposedly have a level playing field, thanks to the European Commission, so let the game begin.

Some are thrilled that Microsoft is finally getting its due, but I think that also happened in 2004 when the European Commission began telling Microsoft what it could and couldn’t bundle with Windows.

That’s what Microsoft has fought the hardest during all of its antitrust cases — the right to decide what it can include in its software. When it lost that right, it protested and negotiated the details until the bitter end. The end result was the stillborn “N” version of Windows with media player stripped out, per the commission’s ruling. Microsoft’s point was made when almost nobody bought the software.

Similarly, Microsoft moaned and groaned and took forever to release and document the server protocols the commission (and the U.S. Department of Justice) forced the company to share. The protocols make Windows servers work better with Windows desktops, and presumably helped Microsoft build its phenomenal server business.

By haggling and stretching out the documentation process for years, Microsoft held its competitive edge while it appealed the ruling. I wonder how much that tactic hurt its appeal. Even if the competitive advantage of the protocols was overstated, the delayed compliance created the impression Microsoft was continuing to benefit where it shouldn’t.

If Microsoft was faster to document the protocols, other companies would have had a few years now to be using them. A few years of this “balanced” market competition would be a chance to see whether the protocols gave Microsoft an unfair advantage.

Microsoft and the U.S. Department of Justice are already making noises about how today’s ruling will limit innovation. If that happens, maybe they should work together on an appeal.

But why not let it sit for a few years. Give Microsoft a chance to show whether it can keep gaining server market share on its own, without any unfair advantage, real or not.

I’d think the clarity and certainty of a final ruling would be more valuable to Microsoft than the distant possibility of winning an appeal sometime in the next decade. Unless it really has been making a killing with those protocols.

Comments | Topics: Microsoft, Public policy

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