The case is about Microsoft’s alleged violation of Europe’s antitrust policy. Competitors filed a case against Microsoft claiming some of its practices are disadvantageous to other businesses. European Commission ruled against Microsoft in 2004. Microsoft appealed and it is now up to the European Court of First Instance to concur or overturn the decision. To discuss the real stakes, we need to dissect the case and look at the different perspectives.
European Court of First Instance: Protector of the Competition or Competitor
As a government regulator, the European court has a duty to uphold the antitrust law. They have the responsibility to ensure fair competition in the market and safeguard the interests of businesses and consumers alike. In the 2004 ruling against Microsoft, the court ordered the company to “unbundle” its products and disclose”technical information to help rival software products communicate better with Windows desktops and servers” (Schenker, 2007). If the court decides to sustain this ruling, they maintain credibility of the court.
However, the case is not that simple. The case was filed by competitors, not the consumers. The court need to establish the legitimacy of the claim. The basic tenet of business is competition and every competition has casualties. Just because Microsoft monopolizes the market does not necessarily mean it has violated the laws. The court need to make sure the disclosure clause does not violate Intellectual Property Rights (IPR) law and stifle innovation. The directive about “unbundling” software to make room for other products should be evaluated for its implications on the consumers.
If they overturn the ruling, they might lose credibility and control in regulation of software industry. It could mean surrendering the market to the monopoly of Microsoft at the expense of smaller businesses.
Microsoft: pay now or later
With the stakes, one thing is sure- Microsoft is going to pay. They can obey and pay now or pay later.
The initial proceeding has caused Microsoft millions in fine and penalty (Schenker, 2007). If they subject to the first option, they can avoid fines but lose control in their product designs and decisions. They can not innovate without the approval of the court. They not only open the market to their competitors but also assist them to compete with them.
As of this moment, the chance of getting away with the antitrust law in Europe is very slim for Microsoft. If they keep appealing, they can take advantage of the slow process to await possible and hopefully more favorable developments in the European Courts.
In the given battle, European court is torn between the court’s credibility to uphold the law and being accused a defender of the competitors. We can not discount the fact that in the light of Europe’s strict antitrust directive, the claims against Microsoft are valid but business is about competition and we can not fault Microsoft for being competitive.
Microsoft’s best chance is to hang on and wait for possible developments. As of the moment, the competitors are getting the best deal. The biggest winners are the biggest whiners. Consumers on the other hand are getting the worst. If the court’s rulings are implemented, customers might end up paying extra for software they could get for free or at a discount on other parts of the world.
Business is about survival of the fittest. The government is responsible for regulating the fairness of the competition but it has no right to dictate a company to help a competitor stay in business. Monopoly is not good but competitors have to find a way to compete fairly instead of running to the court to fight their battles for them. The only way to stop Microsoft from monopolizing the market is to beat them at their own game. While healthy competition is good, the stiff competition in the software industry has moved from simply having options to confusion. The rivalry has produced so much so soon, feeding our obsession for the best and the latest, a race on a street that never ends.
Schenker, J.L. (2007, September 14). Microsoft in Europe: The Real Stakes. BusinessWeek.