EC MS ruling: simply the end of the beginning

This one will run and run

While the size of the European Commission's record $613m fine against Microsoft for breaking European Union competition law has grabbed most of the headlines, a far bigger factor in terms of consumer protection is the fact that the case could now be held up in the courts for another four or five years...

European competition commissioner Mario Monti's decision was supposed to be the end of the European antitrust action against Microsoft, but it is now clear that it is just the beginning.

Should Microsoft be successful in its attempt to appeal against the fine and other remedies, it could be at least four more years before consumers benefit from either more widely-publicised interfaces or the unbundling of Windows Media from the operating system, according to Microsoft's senior vice president and general counsel, Brad Smith.

This could mean that the case is not completed until 2009, according to Mr Smith, a full 11 years after the first complaint was received by the EC from Sun Microsystems: an intolerable delay by anyone's standards and one that will mean that the final outcome will likely be overtaken by technological progress.

The moral high ground?
By pointing out that it could be four or five years until the case is settled, Microsoft has attempted to take the moral high ground following the failure of settlement talks, and Mr Smith's offering of a potential olive branch of more talks will not have gone unnoticed.

The offer of more talks if Microsoft can "get the benefit of clarity" of the European Court of First Instance suspending remedies against it is reflective of the fact that Microsoft is in such a strong financial position that it can afford to extend the life of legal actions taken against it in a bid to seek a settlement that better suits its own terms.

The irony that this strong financial position has been built up through years of anti-competitive actions ruled illegal by both the US Department of Justice and the European Commission will probably not amuse Microsoft's competitors or concerned consumers.

Microsoft claims that its settlement offer would have been better for consumers, but it is clear from Mr Monti's statements that he did not consider this to be the case. "We needed commitments on future Microsoft behaviour because after all they have a dominant position in these markets," he said, echoing a previous statement that Microsoft and the EC "were unable to agree on commitments for future conduct".

Setting a precedent

Mr Monti has talked several times about the decision against Microsoft setting a precedent for dealing with the future conduct of companies with dominant market positions. This is a noble concept, and given the difficulties that both US and European authorities have had in dealing with Microsoft, one that clearly needs to be addressed in the long term.

The question is whether this was the right way to address it and, indeed, whether addressing it now has in fact decreased the chances of consumer interests being protected by ensuring that the case will be tied up in the courts for years to come.

It is increasingly clear that while Microsoft is prepared to offer remedies that deal with past misdemeanours, it is not prepared to change its ways. Thanks to the inability of both sides to reach a settlement, it could be at least another four years until it is forced to do so.

Source: ComputerWire/Datamonitor

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