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September 17, 2007 7:30 AM

Microsoft's Stunning Court Defeat



It's a dark and gloomy day in Redmond, Wash., and not just because of the typically wet weather.

Not since U.S. District Judge Thomas Penfield Jackson's order to break up Microsoft has any court dealt such a blow. Today, a panel of 13 judges upheld all the major findings of a European antitrust case and the imposed remedy against Microsoft.

I will be reviewing the entire ruling throughout the day. The panel of judges, the Court of First Instance, laid out the fundamentals of the appellate ruling in a press statement issued overnight. I can give my first take, based on that document.

What the Court Decided: Antitrust rulings are based on what the courts call "findings of fact," which establish what is believed to be true about a company's behavior. The Court of First Instance upheld the major findings against Microsoft—that it illegally bundled Windows Media Player with Windows and used its desktop monopoly to get unfair advantage in the workgroup server market.

What the Decision Means: Microsoft has, at best, limited options. There is only one appeal left to the company, and that has to be made on points of law. With the findings largely upheld, Microsoft's legal arguments are greatly limited.

What the Court Decided: The appeals panel found that Europe's Competition Commission—typically referred to as the "European Commission"—properly acted in imposing the remedy on interoperability. From the court's press statement:

"The Court considers that the Commission was correct to conclude that the work group server operating systems of Microsoft's competitors must be able to interoperate with Windows domain architecture on an equal footing with Windows operating systems if they are to be capable of being marketed viably. The absence of such interoperability has the effect of reinforcing Microsoft's competitive position on the market and creates a risk that competition will be eliminated."

What the Decision Means: Microsoft will have to disclose server protocol information and in a manner that satisfies the European Commission. Since the March 2004 ruling, Microsoft and the European Commission have knocked heads over protocol disclosure, with a second $357 million fine levied against Microsoft last year. The ruling puts Microsoft in a tough spot, at a time when Windows Server gains tremendous market share against other server software. One issue of contention to be resolved: protocol licensing with respect to free software.

Here, U.S. oversight of Microsoft will continue until at least November 2009, largely because of server protocol licensing. The so-called "California group" of states—those that didn't settle the U.S. antitrust case—and other parties will likely ask the court here to align the two disclosure programs, extending the ruling's impact well beyond Europe.

What the Court Decided: Microsoft's bundling of the media player with Windows is an illegal act. From the court's statement:

"The Court concludes that the Commission was correct to find that there was a significant risk that the tying would lead to a weakening of competition in such a way that the maintenance of an effective competitive structure would not be ensured in the near future. ... The Court finds that Microsoft has not demonstrated the existence of objective justification for the bundling and that the remedy imposed by the Commission is proportionate."

What the Decision Means: The ruling on bundling is devastating because it pierces the core of Microsoft's business strategy. The company commonly integrates new features into Windows as a way of making new versions of the operating system more appealing to customers. The appeals court decision sets precedent that the European Commission could apply to other Windows features. The bundling decision could have the longer lasting impact on Microsoft, should the European Commission choose to bring new legal actions against Microsoft.

Bundling was a part of the U.S. case, but there was no court ruling on the legal merits. Judge Jackson found that Microsoft had illegally bundled—or "tied"—Internet Explorer to Windows 98. An appeals court sent bundling back for further review. In 2001, the Justice Department dropped that portion of the case.

For now, Microsoft is stuck shipping two versions of Windows to Europe. I would watch for competitors such as Google to seek more unbundling of Windows features.

In closing, I am stunned by today's ruling. I've covered Microsoft antitrust woes since 1997. I fully expected the 13 justices, which had to make a unanimous decision, to question more of the original adverse antitrust ruling. Today's court decision will have even greater impact, which I will discuss in follow-up posts.

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Comments (47)

I-Man :

What they lost here will look like chump change compared to what they stand to lose in court against VCSY. BILLIONS!!

Greg :

I think this decision is completly wrong.

If this is upheld then technically GM could be sued for only putting AC Delco steros in thier cars. Or we could sue a Motorcycle helmet company for only allowing their shields to fit the helmet. Or how about we sue HP for bundling their printers with their own ink cartridges.

Business is about weakening your competition, and comming out on top. It's about sales, and giving the consumer a solution that covers their needs. While there are products for Windows that are far superior to the ones included in Windows.. It is a consumers right to go out and get those products. MS should not have to weaken their business standings to give others a chance.

While I agree MS has taken advatage of many companies, this case is just wrong.

cgoblen :

Greg, it's called abuse of monopoly power, and it is illegal.

Granny Smith :

"Business is about weakening your competition, and comming out on top."

LOL

Another MSFT blogger shill? Sorry pal, that may be the Gates/Ballmer version of business ethics, but civilized societies try to work on a higher moral plane.

nadz :

Does this mean that Apple's dominant market share in the digital music market will have to follow the same rules requiring Apple to allow other digital music makers to interoperate with iTunes?

Jimmy :

Higher moral plane? What planet are you from? I <3 naive people.

Maddog :

Greg, you just don't get it. GM doesn't have the monopoly hold of Micro$oft. Ford and Daimler-Chrysler are pretty strong competitors in the auto industry. HP doesn't have anyhting near a monopoly in the printer business; Epson isn't a no-name brand, you know. And helmet shields aren't a separate industry since there aren't many third-party helmet face-shield makers out there. But there are helmet makers that produce complete helmets. The analogies don't work.

The point of antitrust action is to prevent the establishment or the continued existence of monopolies since these strangle innovation and create artificially high prices, among others. To protect the rights of consumers to real choice, it is imperative that such monopolistic action be curtailed.

john g :

RE iTunes & other "digital music makers"

iTunes runs on Windows (Zune MP is Windows only BTW)

Any company can license the AAC codec from Dolby, just like Apple does, and play non-DRM tracks from iTunes on their hardware. The majority use WMA because MSFT paid them to do so. Too bad, so sad.

Any iTunes track can be exported to a CD for subsequent RIPing and use on any music player via the player manufacturer's software.

The EU is using its legal machinery to force Apple to open iTMS further.

Granny Smith :

"Higher moral plane? What planet are you from? "

Jimmy, I'm from the planet where CEOs don't throw chairs in fits of anger; the planet where lying and stealing are considered wrong. Not a bad place really.

Max :

This put simply is a EU attempt to cripple a US company... and yes Apple and iTunes are going to get the same.

Frank Smith :

Europe has different rules to play by than the U.S. so, you get different results.

Frank Smith :

Europe doesn't have to cripple a U.S. Company, the Euro is already worth more than the dollar. A different country, with a differnt court system, different rules. Microsoft gets a little harder slap on the wrist, they will put the cost in Microsoft Software and keep rolling as usual.

Dusty :

The business run government of the US doesn't have the stones to stand up to a major contributor to their political party. The results of the anti-trust case in the US proves that. The Sherman Anti-trust act only applies to companies that are on the wrong side of the current govenment party. At least the EU can see the facts and has the stones to act on it. Ethics and MSFT are an oxymoron. The 90+ patches in nine months for Vista show they can't even get their own feces right.

chips :

MS has so much money, that it would rather eventually just pay the EU fine and continue to stall on the interoperability for servers protocols. It is just a slap on the wrist for MS, 600 million something is chump change for a company that jus alloted 1.15 billion to fix the XBox360 with the red ring of death out there. And that too was nothing to bother MS, just small change.

When you make 20 billion a year just on Windows, a 600 million dollar fine over several year, is more of a joke to MS than anything else.

The serious down side for MS, may be that the EU will eventually greatly start to increase these fines and take real action against MS in the future. So their is some worry at MS.

Calin Iaru :

They say that bundling is somewhat anti-competitive, but what qualifies as bundling? Is an application considered bundled if it cannot be removed or if the removal would harm the stability of the operating system? If not, then why isn't Apple sued for same bundling of QuickTime with the os?
I see that Windows Media Player 11 can be removed from the computer.

Kokuryu Tenchi :

Cant wait for a new anti-trust ruling in the US to force the total breakup of Microsoft into smaller companies - we all stand to gain from that.

Bill Jarvis :

If you remember, when the $1billion to fix the xBox was announce, MS as not happy that they had to set up a reserve to pay for those repairs, it was a much larger number than they thought it was going to be. Plus all the $100's of millions they are paying out to settle law suits is starting to add up. MS is a public company, and as such, it's management and tactics are scrutanized all the time.

Windows Media Player was unbundled because MS thought they were going to loose in the US courts with IE.

Also MS has to face the realization that Linux is going to start eating into their market now that major PC manufacturers are making it easy to order. It will be interesting to see in a year what the sales volumes are on those PC's.

It takes a while to earn a billion in profits. I wouldn't be happy to "waste" billions in a matter of a few short years.

John :

I agree the argument against MS sounds fishy when compared to other products/industries. The question is whether they are abusing their dominant position in the industry by keeping competition out. I would like to say that all parties should have the same access to integrate their products into the Windows OS... But at the same time, I always believed that innovation was to be rewarded through patent and trade secret protection at least for a time.

One problem I see is that through the bundling, it makes it hard to promote competing products for sale. The perception is that things like Media player are free, but in reality they are included in the $100-200 cost of the os... If forced to unbundle Media Player from Windows, will they offer it at a price and lower the windows product at a lesser price.. I think not, and the market will still be unbalanced.

The Truth :

I am thrilled that a court of law with some real power has decided to force Microsoft to change it's business practices. I believe MS has some great products and great minds. I also believe MS has been and continues to be a anti-competitive, bully on the scale of Rockefeller, the railroads, the Mafia, Roosevelt in the 30's-40's, etc. MS needs more humility. This is a good start.

evan :

Kokuryu Tenchi said:

Cant wait for a new anti-trust ruling in the US to force the total breakup of Microsoft into smaller companies - we all stand to gain from that.
Be very carefull of what you wish for...

Some One :

And this is not sharing IP?

www.microsoft.com/about/legal/intellectualproperty/default.mspx

Some One :

chips :
Your right about the money that can be found in the sofa.

What they don't like is having to giving away source code or other IP that goes beyond sharing and is more like giving it away.

Robin :

I remember when Judge Jackson's decision came out. Microsoft stock went from $130+ to around $60 pretty quickly and took the whole stock market with it.
Let's see what fallout this decision will have...

Suja Yusuf :

To Greg: who said,

"I think this decision is completly wrong."

Your examples are sound but not applicable. None of your example companies have 90% market share. When that happens, the free market (capitalism) ceases to exist.

When a company has 90% market share in any one area and then leverages that to increase market share in another area, that practice is illegal by free market standards.

For example what would happen if 90% of the roads in the world were owned by Microsoft and they demanded that in order to use their roads one must drive a Microsoft car?

The other example is the lack of innovation. Look at IE. After putting Netscape out of business through bundling and exclusionary business tactics, there was no innovation in IE for 5 years.... until Firefox shows up! All of a sudden we have IE 7 with features like Tabbed Browsing. Why couldn't Microsoft come up with this 5 years ago? Because there was no reason to... they had a monopoly! This keeps the user from experiencing the best user experience including new features and new ways of doing things.

In my opinion Microsoft should be prevented from participating in any other area as long as they have a 90% market share in Operating Systems

afdtk :

'bout time.

Brian :

Yes, maybe that is a good idea, Suja Yusuf. Tell MS that if there is a new field/feature/function relating to or connecting to PC operating systems, they CANNOT enter that market if there is a single competitor already, unless they reveal any and all protocols required by the MS offering, to any and all competitors who might wish to enter that market. That way there are no hidden advantages to the MS offering. The whole issue here is "abuse of monopoly", not the monopoly itself, even though I personally believe that is bad, bad, bad. When you have 95% share of a market, EVERYTHING you do must be carefully analysed (both internally and externally) to ensure you are not crushing the competition. Giving YOUR offering away for free is just such an action. And as for those who say we are better off having only one word processor, and one spreadsheet (both MS) I ask how would they feel if there were only Chevrolet cars...not even Buick or Pontiac. And certainly no Ford, Jaguar, Porsche, Toyota, or Ferrari. We all need the ability to choose. Each manufacturer can compete on the basis of features and ease-of-use. We have no choice under the current MS monopoly. Three cheers for Europe !

chips :

Obi Wan: Luke, I feel a stange disturbance in the Force!

Luke: What is it Master Obi Wan?

Obi Wan: It was like a million chairs, suddenly cried out, and then there was only silence.

galaxis :

Greg, you're right on the money dude. Microsoft has about as much a monopoly on software as GM has on automobiles, and where the other folks don't get it, is that all you need is enough of an influence to influence the market - which GM has.

Another mistake people seem to make is that the "free market is in danger"; quit whinin' jeez! You guys act like you have stock in Oracle or Google or something!.

Yet another fact that the respondents (and the courts) have misinterpreted is a monopoly meaning a certain % of market share. The fact that there's ample competition is the compelling factor. People can choose whatever operating environment they want - period. Non-one's stopping them.

Keep MS out of markets based on market share? Will you listen to yourselves?! How ridiculous is that? THis suggestion just screams "I'm jealous"; what are you guys really complaining about? You realize of course, that this rule would have to apply to everyone, right? Impartiallity; it's a beautful thing!

So, MS gets broken up and all the haters cheer "yea". Since the complaining companies have spent their efforts whining about a company that simply has a better engine instead of actually fortifying their positions by developing better products (novel approach), we get stuck with a bunch of crap software because people are too busy whining and crying "unfair competition!" to actually make better products. We might as well just add that as a marketing strategy and start teaching it in schools. Innovate instead of complaining! Plenty of companies out there (as evidenced by MS buying a lot of them!) doing it better in some ways, but their ride to the top has been through the normal channels (like MS had to go through) - which MS being around obviously hasn't stiffled. We're dangerously close to making certain that profitability and just being smarter at some stuff will no longer matter; just whine to th government to level the playing field for us...

You know, it kills me to see these people making MS out to be some villain and spelling their names with the $oft! What, everyone else is out there for philanthropic reasons? Grow up. MS hasn't done what any other company would have (and has) in its place; look at what else is going on out there; why is no-one complaining about Apples "monopolistic" practices? I mean, they're really not, but why don't the bashers present some semblance of objectivity?

You never hear MS's customers complaining that the products are falling short; it's always a competitor or basher making the most noise. The inescapable conclusion is that MS spends a helluva lot of effort and money taking care of you; researching and a track record of innnovating in areas where others just dropped the ball - and it's MS's fault? PUH-LEASE!

I realize we're in tough times, but we have to realize that these guys are damn good, caught other companies lunchin'/complacent/not innovating, and their tactic to catch up was to start this crap.

Brian :

I had another thought. Maybe someone with a legal background can tell us.... If a case is settled out of court, there is no "record" against the defendant, I believe. What would be the result, over the long term, if those with lawsuits against MS, started to refuse to settle out of court, and took their chances in the courtroom ? Sure, there is a risk they might loose, and MS could try to delay the court date, thus forcing the plaintiff to settle due to increasing legal fees, but suppose it DID proceed to a court ruling. If MS was found guilty of whatever the suit was about, what effect would that have on the next case that came up for trial ? In criminal cases where the prosecution can show a history of law-breaking (and I understand that evidence is not always allowed) would not that make it easier to obtain additional convictions ? We have seen a great many out-of-court settlements by MS. I wonder what the reaction would be if these cases had all gone to trial, and MS had been found guilty by all/most/some of them, if a similar case comes up again. If I were a lawyer I would try to get into evidence all previous settlements, and let the judge/jury decide if these were simply MS trying to close these cases quickly, because they have extremely deep pockets, rather than fight them in an open court, and maybe being convicted plus paying a big settlement. Or, if they were MS "buying off" the plaintiff, so they did not end up convicted of something.

random reader :

galaxis: what the heck are you talking about? GM having a monopoly within the EU? Get your facts right. The rest of your post runs 100 % on sidetracks. Troll.

Max: oh yes, here we go. It is all about U.S.A. vs. the World. Sure it is.

Frank Smith: please, EU is not a country.

Others: this is not about the fines per se. The competition law is the core of the whole development of the European integration from the 1970s on. There is more to come if the MS will not comply.

Generally: the history of Western world has never seen such a complete monopoly as Microsoft has had and still has as of today.

galaxis :

Hey "Random Reader":
Obvioudly you haven't the power of metaphor or comparison in your vocabulary; his was a reflection on another post. Others, read with the intelligcence meant.

So you're saying that a company that has competitors from OS to player to browser to Office Automation tools - that gets slammed from MA to PM about how their products suck and there are better ones out there - is more of a monpoly than AT&T or Standard Oil (no competition whatsoever)? Good observation.

Get it through your heads: there are other products out there, and the public has the freedom to choose which ever one they want. And don't give me this "how would they know about it?" crap; I see way more adds for other company's software thatn MS's, and "research is in the hands of the buyer". Competition is out there.

Sure MS used unfair advantage in some areas, and they're paying for that, but so has everyone else - just not with the media "velcro coat" MS has. It's going on right now. I'm in themiddle of it!

macnut :

This is so-o-o wrong.

Sure, MS plays hardball to protect its investment, property and position; what business owner doesn't? And for those of you using MS products to operate and manage your businesses you're pleased with this approach.

If only it were this simple: MS should just stop selling its O/S in these countries and see how loud the complaints are then. And to be realistic they could then run their own pirate shop to get product out to users.


Albert D. Kallal :

I dont really understand the windows media player issue. That media player was bundled with windows 3.0 back in 1990. Real audio as a company did not even exist. Further, the problem with Real is that they want to install this crappy player that throws advertising up on your screen. The approach here is that Real wants to own part of the media player and that is just plain wrong.

Why not go the way of the MOST successful media system called DivX. It is from Europe, and plays 100% nice with windows media player, or you can use *their* media player.

Why did not Real Audio simply release a codec that allows real video to be played in the media player like everyone else? Heck, even apple and quick time does this.

The problem with Real is they wanted to throw up advertising every time you play their Real system. We talking about writing programs that *run* on windows here. The idea that consumers have to install a new set of sound drivers, or a new media player for EVERY NEW media system is insane.

Apple works with media player (even with the iPod). The Europe DivX is also eating Real Audios lunch here. DivX is blowing Real out in terms of market share, and DivX works 100% FINE with Windows Media Player.

Now, you-tube comes along, and they also managed to build THEIR OWN propriety system, but again runs fine on windows or Mac.

There is a BIG fine line between me running some software on windows and me trying to OWN PART of windows like the Real people were trying to do.

Both DivX and you-tube show that this court ruling is a crock.

When the last time you had to Play a Real Audio file? Real just screwed up their own company, and then went crying to sympathy EU court.

The DivX people came along and blew Real right out of the windows game. And, now you-tube come along, and is doing the same thing to Real. You-tube is now HUGE with their video system.

So, why only cry about Real Audio here? Did the media player stop You-tube, or the DivX people ONE BIT in the marketplace? (no..not at all!!). Does ANYONE in Europe want a version of windows without the media player to PLAY DivX which is owned by a Europe company??? (this is so stupid).

The key concept here is that the DivX and You-tube have shown that you can beat MS at their own game. The victim here is Real because THEY should have been the next you-tube. Man, did Real blow their opportunities or what? Now, complain to courts? (of course Real will cry like a baby on the shoulder of the EU).

The Divix people realized that they just have to make a great codec that runs well on windows, and allow consumers to choose the DiviX player, or choose the windows media player.

The DivX people NEVER GAVE UP control of their system by allowing consumers to use DiviX with windows media player. They still control the codec and technology (that is the important part).

Who cares if you use a Mac, Windows, windows media, or the player included with DivX to view a DivX video?

I down load and use and prefer DivX videos all the time, but, I play them in the windows media player. Neither MS or DivX people care one hoot.

However, I can not play real in the windows player (why???).

All that DivX cares is that I using their codec. Windows is just the platform, and if Real had figured this out, then Real would have been the next DivX, or even more so the next you-tube if they had any brains.

Darn sad that the EU courts are supporting a lame duck and a company that is just so poorly run that their only recourses is the courts to save them. Shame on the courts for supporting losers in the marketplace. Is the EU really bent on supporting loosers? (great economic policy!)

The DivX people (from Europe I might add) showed how this is done, and simply realized that windows is platform that you run your software on. The problem with Real audio is that they wanted to REPLACE the windows media player.

The EC ruling is a ROTTEN ruling with respect to the media player. The media player was bundled with windows BEFORE Real EVEN EXISTED as a company!!! It is not like Real started pushing a media player, and THEN MS started to bundle the media player as a RESPONSE to Real. The media player was shipped with windows 3.0 back in 1990!!!

So, now Real comes along and says that MS needs to change the including of media that MS has had for the last 17 years of the computer industry?

If ms STARTED bundling media player AFTER real came along, then I might have sympathy here. However, Real as a company was created AFTER windows had started including the media player back in 1990. MS did NOT all of a *sudden* bundle windows media AFTER companies like DivX, You-tube or Real came along.

I would support this EC ruling if media payer NEVER was bundled with windows for the last 17 years.

All Real audio had to do was to allow their codec to play nice with Windows media player. Real failed in the marketplace because they NEVER wanted their codec to function with Windows Media player.

Real is now crying over spilled milk, and the rotten courts went along with Real because they were looking for *something* that consumers could understand to make the ruling look good.

The EC ruling with regards to the media player is just criminal on the EU side of things. They can make the ruling because of their power..and are simply grabbing money. They are much behaving a like a banana republic taking payola to allow goods to enter their country.

These people are government employed gangsters simply grabbing money.

Really, a sad day for all of the EU.

How come DivX people from Europe, or you-tube are not having any problems like Real??? Think about this!

Albert D. Kallal
Edmonton, Alberta Canada

john doe :

"radom reader", EU is feeling the same "slight-of-hand" as the rest of the world; it all originates from the same impetus, so galaxis' comments are reflective of the entire "anti-MS" movement. They just took the hint from the West that "government-assisted marketing" is indeed at their disposal as well.

Marco :

“and the animals hath no name because nobody had named them yet. And men had no laws, because crime did not exist”
It is true that Ms triumphed when it gave us a choice. And that took them to the top. But they changed-they became arrogant, extortionists and monopolistic. (Have they got the ring to dominate all?) So now they want to avoid any possibility of choice (even manipulating public opinion through bloggers and shills) But the world is not so young- crimes have got names, and now we know which ones they are.

A better world: Some day I will enter a store and will be able to choose a PC with the hardware and the price I want. With the OS I want. And this OS will allow me to install all the applications I desire (browser, media player) from a list (maybe “most popular”) It will all be about choice. And the only factor now altering the equation (Ms) will be pacified.

MikeL :

Greg: You are contradicting yourself.

"It's about sales, and giving the consumer a solution that covers their needs. While there are products for Windows that are far superior to the ones included in Windows.. It is a consumers right to go out and get those products. MS should not have to weaken their business standings to give others a chance." There are superior products, and M$ makes it hard to use them, regardless of what the user wants.

Microsoft is not covering my needs. I use Firefox, Lotus Notes, and Winamp. Therefore, I do not need IE, Outlook, or Media Player. Have you ever tried to actually uninstall them? It is nearly impossible without ruining the install base. I have to hack files just to uninstall the damn Pinball game.

spot :

I hope they allocated a lot of space for the replies on this topic!

Albert D. Kallal:
You said a mouth full (literally and figuratively! Ha, just kidding). But you're wrong; how dare MS make their software available in other languages and try to get into EU markets! Couldn't even keep a straight face on that one. Talk about private sector controlling the gov (an earlier anti-MS post). You know, in the spirit of what anti-monopolistic letter is trying to avoid (using established power to unfair advantage), isn't the EU just telling on themselves with this media player thing (and overall)?

The next step will be to take another look at what "unfair advantage" really means; hopefully the US will take this opportunity to update it's scrolls (I doubt the more tradition-steeped European govts will). A whole new light (think about it)...

MikeL :

M$ could save itself a ton of legal trouble and improve it's OS at the same time by making it's software modular. Media Player, check or uncheck. IE, check or uncheck. Outlook, Check or uncheck. Right now, everything is tied together like the game "Kerplunk" where you pull out the sticks and try not to drop the marbles. Each Module should be able to function within the OS without other modules depending on it, or on common .dlls. It's a mess.

galaxis :

Ay Karumba

MikeL:
Don't blame MS for not being ale to buy a PC with just the software you want, blame the PC manufacturers; they could make a Linux PC if they wanted to (and some do). Blame the competition for not giving them th price/functionality point MS does. Anyway, it's like a stock car; you buy it, then fiddle with the stock parts until you get what you want. PC retailers aren't your only avenue to getting a PC anyway.

Hey, in case you guys forgot, MS was the original "giant-killer" when having to deal with IBM, Oracle, AT&T, etc. of old. Funny; it's like the Taliban - they used to be American allies until we got a new enemy. I bet the bashers would've been (were) big MS fans when they decided to bump heads with Big Blue, PARC, Sun, Burroughs, Sperry-UNIVAC, Oracle, etc. and make something useful, pretty, and affordable.

We're in the digital age here folks; it's not like competition has to capitalize money for manufacturing equipment or plant facilities that MS may already have a head start on; that excuse doesn't play either. Internet has indeed leveled the "virtual" playing field (it is the stone with which you Davids can go forth and slay Goliath); my website looks a lot better than MS's! To a 20" monitor, they all look the same; you have a good product nowadays, you play the shareware roll, hit your search engines, market electronically - all like everyone else has to do - and you can topple a giant.

Let's all stop "boo-hooing" lame business models, inferior products, or mypoic business longevity strategies; get in the game!

Recurring theme here:
There's plenty of competition for MS.

galaxis :

MikeL:
Actually, that's exactly how the OS is structured. Logically, Windows is compeltely modular - making it hard to pull pieces out is just deceptive tactics; they actually had to go out of their way to do that!

I actually like your idea about buying a PC and being able to order the "parts" you want. You want to put an end to this crap now? Travel to the "center of the earth" - PC manufacturers. It's actually becoming viable to would-be PC manufacturers string PC parts together as well (Mike Dell folks - and that was back then); desktop musicians can buy software/cheap hardware that emulates multi-thousand-dollar studio hardware. Music distributers can be an RCA or Sony just by using the internet as a distribution center (what really scares them, not pirating BTW). Someone just needs to offer this service; heck, you can still "mass produce" if you want, but softwae installation lives in the world of the abstract electron; you could configure a pre-assembled PC by using your check-marks, place your order, they run canned installtion procs (and config testing software) - and you're off! Hey someone better cut me in if they run with this...

John :

MikeL... I like your concept of modularization, but Can you see the duplication that you would create... You could turn windows and the other modules into bigger disk/memory hogs than they already are.. Issue is that Microsoft is building integration into these modules such that Media is built/using IE, Windows using IE, IE using Media, etc. The integration is what helps keep the size down by sharing components and functionality. That has been MS position all along.. you try and integrate the desktop into the web to enhance the user experience, you reuse the features already available to IE... Pull IE and your desktop breaks...

Nothing prevents you from installing/using other products, the key is the integration benefit you get from the MS product. General rule of thumb on any product, car, stereo, etc is you never get the same fit as a factory installed option. ever add an after market sun roof or power windows to your car?

Again the issue I see is that of pricing... Microsoft throws these options in with the OS.. That essentially makes them free... So companies that wish to compete on these products must either have a significantly superior product - despite the potential lack of integration, and microsoft should not be mandated to integrate without sufficient financial incentive from the company - or offer it for free (or use ads to supplement their investment) This effectively keeps products out by limiting financial viability - unless the superior product can be developed. (does a car maker need to allow a stereo company access to integrate with it's on steering wheel controls? You can use any stereo you want... that runs off the 12v available on the car... it may not fit or integrate as well into the car as you would like.. even if it has the best sound on the market... should the car company be forced to provide this integration?)

Then the issue of interoperability hits again... even if a product is superior, if it fails to integrate with the main stream install base (car radio that must run on 50v DC for example) it will fail to get the traction necessary to surpass the mainstream product.

yiuokdjf :

Could MS just pack up there bags and leave Europe? Would apear as black mail? But leave Europe with what thousands, millions, of people with out a job. No one can sell any MS products in Europe. Just leave. Don't even give them support just hang up the phone, give them one of those birds nIn.

Pack up your stuff MS and just come home leave Europe behind like we did in the 16th century.

I know MS is bad an abused there monopoly but watch out EU is using this because of the hatred we have toward MS. Watch out becasue next it will be the ones we love like Apple or Google. Now they will base it on how much of the market one has regardless of they abuse it. Apple with %80 of music will suffer and Google with more that %60 search will suffer.

We gave them an inch with the one we hate and justify thier action, but what will we do when they want more than just an inch and take those we love.

killbill :

Sod media player, when is something going to get done about M$ making direct x10? (which all games are going to need in a few years) only working on windows if that isnt wrong i dont know what is, basiclly m$ trying to make it so if you want to use the latest games or 3d applications you must have windows vista or it wont work lol

rsl :

GE and Honeywell merger was sidelined by EU. Later, oops we made a mistake (screw you US).

I have no love for MS, but EU has now supplanted US legal systems and replaced with it "let's make EU more competitive by crippling American Companies."

The action by EU is tantamount to declaration of War on US and all it's interests. I am certain EU will target Apple and Google in near future.

I won't be surprised if EU goes after McDonalds and Disney for shamelessly exporting American culture.

puppet :

what?
microsoft cannot put Windows Media Player on Windows Vista?
is that right? or am i confused lol

HistoryTeacher :

Before continuing to go off on the EU, perhaps we need to look back at pre-MS days to see what precedent American courts did or did not set. The single biggest government vs. industry hubbub concerned IBM. IBM made the hardware, the operating system, and had a lion's share of the application software. It was by far the single largest "computer" company of its time (I did not necessarily say best, just biggest). Its size and power gained the attention of the US judicial system. The word monopoly started being associated with IBM, to the point where the company actually started worrying that it would be split up. Fortunately it dodged the bullet by divesting itself of most of its application software business. It also decided to "outsource" the operating system for its new line of computers. It chose one of many DOS vendors, a very small company named Microsoft. As expected, IBM's personal computer was a hit, and dominated the market. Other hardware manufacturers would label their PC's IBM-compatible. IBM had a vested interest in the OS of their new computer, but agreed to license it to others (along with MS). There were other DOS systems out there, but with IBM's backing MS-DOS became dominant.

Fast-forwarding a bit, we see Microsoft supplanting IBM as the big player in computers. There was repeated discussion on MS' use of its position to force PC makers into "exclusive" bundling of its OS with their PCs (as in if you want DOS / Windows cheap then you won't offer PCs with anything else). For whatever reason nothing ever came of it (the saying, "don't bite the hand that feeds you" comes to mind).

You cannot compare MS to GM or any other car manufacturer. Compare it to other computer companies. Most no longer make both OS and business / end-user applications. The ones that come to mind: IBM, Apple, Sun, and HP are known more for their hardware and OS than for any application software (IIRC Apple actually had application software but spun it off to a separate company to avoid the attention that IBM received).

MS, not (currently) owning any hardware, has chosen to go the OS / application software route. What MS could not develop in-house it acquired (e.g. Great Plains Software). What was once a vast marketplace has increasingly become solely the domain of MS. Some call this good business. Others look at it as predatory business practices, which are often (rightfully) perceived as unethical and illegal.

The EU decision is about the separation of OS and application software. The two are very different. Any company that owns one part will definitely have an advantage over any competitor to the other. MS should have been split up years ago.

Topaz :

The decision against Microsoft by the E.U. Court of First Instance was completely right. I only wished the U.S. Courts ruled in a like manner in U.S. vs Microsoft, instead of the goverment settling with Microsoft. That decision to settle was an abomination.

Microsoft needs to answer for and be held accountable for their behavior. But most importantly, suffer the consequences.

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