Vista and antitrust confusion

The EU claims that the burden of determing what should or shouldn't be included in Vista in order to comply with EU antitrust rules falls on Microsoft. Unfortunately, this claim reveals a fundamental lack of understanding about the nature of antitrust law.

Microsoft has suggested that they might have to delay the rollout of Vista in Europe unless they learn soon whether the EU will require design changes in order to pass antitrust muster. In response, an EU representative had this to say:

It is not up to the Commission to give Microsoft a green light before Vista is put on the market; it is up to Microsoft to accept and implement its responsibilities as a near-monopolist to ensure full compliance with EU competition rules.

That response misses something pretty fundamental about the system of laws known as "antitrust." Antitrust is NOT like laws against murder, or theft, or other "crimes" laws have been written to prevent. It's pretty easy to determine whether or not someone has been killed, or something stolen.

Antitrust isn't like that. Antitrust laws don't provide ANY guidance as to a standard by which to judge whether or not a company is a "monopoly," nor any rules - much less limits - governing what should be done once a company is declared a monopoly. On the determination of monopoly side, it all comes down to market definition, the exact shape of which is up to the prosecution (though they have to prove the validity of that definition in court). In America, market's have been defined in such a way as to block the merger of shoe companies out of concern that the merged entity would have partial monopolies in some small towns. On the remedy side, penalties can range from a simple fine through a complex micro-managed breakup in the style of AT&T or Standard Oil.

Complicating the situation is that in the cut-throat world of global markets, you are dealing with companies that kill each other on a regular basis. They create exclusive deals with partners, they actively attempt to undercut the price of rivals, they say bad things about competitors in the press (part of the interflow of information, and something the other side does in return), and do things that generally wouldn't get you invited to little Timmy's birthday party...and these are considered some of the good aspects of competition.

This is why antitrust REQUIRES someone to make a determination. Such a determination does not fall in and of itself from the text of current antitrust law.

I'm repeating myself, but it's a point worth repeating: Antitrust REQUIRES that someone make a call as to who is or isn't a monopoly, and what is or isn't permissible activity of that monopolist (whether the definitions and constraints should be so loose is a different question, but people who've read my opinion on this matter can guess my thoughts on that). In America, that determination is largely worked out in the courts and a judge (in this case, Kollar-Kotelly) is responsible for oversight. In the European Union, it is worked out internally by the Commission then passed through a legal appeals process at the Court of First Instance. Either way, however, SOMEONE is determining what is considered permissible.

This is the situation apart from any antitrust ruling. The nature of a ruling can add its own complications.

In America, Microsoft was given the right to include, for the most part, whatever it wants in Windows (leaving questions of design with software engineers, in other words), provided they ensured that core interoperability protocols used were fully documented and alternatives could quickly and easily be chosen that override the defaults. Though there is of necessity some imprecision in the ruling (oversight is still required), it is reasonably well defined such that Microsoft mostly knows what it needs to do. In Europe, however, the EU Commission ruled that, along with documentation requirements for key interoperability protocols, they had to offer a version of Windows WITHOUT Media Player.

Ignore for the moment that no one bought the Media Player-free version of Windows. Why Media Player? Why not Internet Explorer? Why not MSN Messenger? Why not Microsoft's TCP/IP networking stack, the inclusion of which put companies such as Trumpet Winsock out of business with the arrival of Windows 95? What about standard HTTP libraries, something someone else could do separately? How low in the software stack should we go?

No, saying "it's obvious" isn't good enough.

What was it about Media Player that made it different than any other inclusion, and how can Microsoft, on its own, generalize from it so that they know what they can or cannot include in Vista?

Basically, the EU Commission created a ruling that is EXTREMELY hard to use as a foundation for self-regulation by the accused. This yields a situation where the EU Commission is OBLIGATED to be the gatekeeper post-ruling in ways the US government does not have to be.

If the EU doesn't want to be the gatekeeper, then it needs to create a ruling that does not force it to act as such, something that, at a minimum, should include declaring that Microsoft has the right to design its own software (documentation requirements, on the other hand, are reasonable). Until that happens, the Commission needs to understand that it IS in the driver's seat with respect to whether or not Vista gets rolled out in Europe at the same time as the rest of the world.

My opinion, of course, not Microsoft's...


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