EU emboldened; Who's next on the hit list?

EU emboldened; Who's next on the hit list?

Summary: Now that European regulators got their big victory over Microsoft attention should turn to who's next on their hit list. The EU case against Microsoft market position and anticompetitive behavior boiled down to two items:The ability of Microsoft to bundle its media player with Windows considering the company's market share; And whether Microsoft has to share communication protocols on the server side in the name of interoperability.


Now that European regulators got their big victory over Microsoft attention should turn to who's next on their hit list.

The EU case against Microsoft market position and anticompetitive behavior boiled down to two items:

  • The ability of Microsoft to bundle its media player with Windows considering the company's market share;
  • And whether Microsoft has to share communication protocols on the server side in the name of interoperability.

Microsoft struck out on both counts Monday when its appeal failed (see Techmeme). Now Microsoft General Counsel Brad Smith was far from combative in his press conference that just ended, but he did make one statement that should be ringing in the technology's industry's ears.

"The ruling gives the commission quite broad power," said Smith.

Indeed, the EU has multiple targets to consider, especially as regulators want to flex their muscles. The Reuters story on the EU Competition Commission notes that the group has the green light to pursue other antitrust complaints against Intel, Qualcomm and Rambus.

There are a few more names to be added:

Apple: Don't be surprised if the EU gets revved up on this one. Apple has a hefty market share in Europe with iTunes. Doesn't share its DRM protocols with others and is basically a walled garden. Also: Apple has already had its run-ins with regulators in France before.

Now that the EU has given the concept of interoperability priority why wouldn't a broader battle with Apple be opened?

Google: Interoperability may not be an issue, but market share could be. Smith made sure he tossed Google's name out there for giggles. And why not? If Microsoft has to deal with the EU why shouldn't its arch rival? When Google closes its DoubleClick deal don't be surprised if the EU whips something up.

Intel: Intel's market share means the chip giant will have a big bull’s eye on its back with the EU. Intel has already had its problems in the EU. Any complaints by AMD against Intel are likely to find a more receptive audience in the EU relative to the U.S.

And you could go on. Why couldn't the EU target any company with a big chunk of market share and a bundle of software?

"This decision will occupy the thoughts and discussions of many people in the months and years to follow. It is one of those decisions that has extraordinary impact," says Smith.

Part of that statement is spin. But a big part of it is reality.

That's why when I see statements like this from Red Hat they spark a "be careful what you wish for" reaction from me:

"Today's decision by the Court of First Instance in Luxembourg in the Microsoft matter is great news for innovation and consumer choice, both in Europe and around the world. The Court has confirmed that competition law prevents a monopolist from simply using its control of the market to lock in customers and stifle new competitors," said Matthew Szulik, Chairman and CEO of Red Hat. "In our business, interoperability information is critically important and cannot simply be withheld to exclude all competition. Given Red Hat's firm belief that competition, not questionable patent and trade secret claims, drives innovation and creates greater consumer value, we were pleased with the overall decision and look forward to examining the decision in greater detail. Red Hat would like to congratulate the European Commission, and particularly Commissioner Neelie Kroes and her services, for their persistence and courage in bringing this matter to a successful result."

Be careful Red Hat. At last check your market share was going up too.

Topics: Apple, Intel, Linux, Microsoft, Open Source

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  • Great news for consumers in general, though the penalties are just a slap

    on the wrist. It is all about PR for Microsoft here and to convince all of the people in Europe that they are not so bad after all and there is no reason to use Linux.

    But, they will be cranking up the dirty tricks like OOXML along with propaganda campaigns at the same time. We have awoken a sleeping giant and they will be furious.
    • s/slap/tickle/

      Laughing all the way to the bank. Just part of the cost of doing consumers.
      Yagotta B. Kidding
      • Yes, Microsoft has to be laughing here. While pretending to be truly hurt

        here, they just love everybody focusing on this while they have quietly moved on to the next dirty lock-in tricks that will eventually get them in trouble, but now until after they have reaped the benefits of them. They will again pay pocket change in fines, and just keep on laughing.

        The only value here is the negative PR for Microsoft, but, you can see them spinning this an pretending to be humble, trying to get people to feel sorry for them. Hey, it might just work!!
    • europe vs. us

      Intel, Google, Microsoft, Apple -

      if you can't beat them just send the lawyers after them.

      I think the eurocrats should just legislate innovation.

      Soviet Union, European Union what's the difference?
      • Microsoft is International - hardly American - MafiaSoft

        The point is a good one. Europe is not America and the Warsaw Pact Nations are full of terrorists that wish to return to the old pre WWII ways. The file "Other Peoples Lives" was suggested by the WSJ to get a handle on what the EU is dealing with. MafiaSoft, as it was described on another thread, is the one word explanation.

        Microsoft was one of the largest capitalized companies in the World. It is absolutely incorrect to categorize the company as an American Company. It is called in the USA - a transnational big business. Think a little bit about this.

        Microsoft's employee base - on US soil - is almost 20 percent foreign. Word was written in Polish (well perhaps not literally) but its pre Office 2007 flavor is a defacto Polish product. Its competitor WordPerfect was an American Product. You do not get more American than Mormon - I am told. A large investment group is not American and Microsoft pays hardly any tax to the USA because its investors put pressure on officers to lobby against corporate tax. Then the Gates family law and lobby firm is responsible for Abramoff, an International who was the key man at the firm and later recommended consultants to Microsoft to continue the corruption of the US government. From one perspective Microsoft is an enemy of the USA.

        What I am afraid of is that the billion fine is not punishment but rather a way of extracting wealth from the USA. I would much preferred that the fine be applied to future product sold in the EU. The EU is still about protecting monarchies and monopolies for kings and robber barons. It remains that way until laws involving copyright, patents, and Web 2.0 become Americanized.
        • Pays hardly any tax??

          According to their income statements, they have a provision for income taxes (based on their actual total income, not just operating income) of $6,036,000,000.

          I'm sorry, but 6 billion dollars seems like more than "hardly any" to me.

          It is an effective rate of 30%. Same as other corporations have to pay.

          So, what are you complaining about to this effect? They pay the highest tax rate for corporations.

          When companies are lobbying to cut corporate taxes, and it goes through, it's usually because corporations are subject to double taxation, so cutting initial taxes actually makes it slightly more "fair" then it is currently.

          They may lobby, but it isn't doing them any good. They will pay their 30%, and then owners will also have to pay taxes on their cut of the after-tax income (that's why it's double taxation - taxes are paid on the same money twice).
  • RE: EU emboldened; Who's next on the hit list?

    Great News! Finally some entity will discipline the Bloatfarm and pull down some of the illegal and abusive practices.

    It is so delicious to think that the Bloatfarm will be fined further - "That suggests that further fines -- ???281 million in 2006 for Microsoft's refusal to comply with the decision and a running levy of ???3 million per day since August 2006 for excessive pricing -- will also remain in place, though they weren't the subject of Monday's litigation."

    Imagine! Finally this abusive dungpile will be stopped from destroying an industry!
    Jeremy W
    • Eternal optimism

      [i]Imagine! Finally this abusive dungpile will be stopped from destroying an industry![/i]

      Not really -- but the cost has gone up slightly.
      Yagotta B. Kidding
      • You are your MS pushing cohoarts amaze me!

        Y'all seem to think 'Who cares if they do wrong! As long as they can afford the penalty let them continue to do so as long as they make money for themselves and others!'

        Like Cheech and Cong once wrote about the kid being punished by the father "What are you trying to do, tickle me?"

        Hope you and all MS upper management rot in hell!
        • Eternal cynicism

          Of all the people to accuse of being MS shills, Yagotta B. Kidding is certainly not one. A quick look at other posts would tell you this.

          What is your problem? Are you slow?

          You certainly need anger management classes, but I'm wondering whether adult day care may be useful. They may be able to help you turn that filter between brain and mouth up far enough so you'll stop making yourself look dumb.
  • It's not so much the market share...'s how that market share was acquired and how it's been (ab)used. Microsoft has, over the years, lied, cheated, strong-armed, and extorted its way to a near monopoly, and then abused its market dominance to severely disadvantage competitors and gouge unwilling customers. <i>That's<i> why the EU targeted them.

    <p>Yes, Apple isn't particularly into interoperability, but they don't seem to have a monopoly's power to abuse competitors and consumers. There <i>are</i> significant other sources of music and, really, unlike computers, Western civilisation won't collapse without yet another Hannah Montana (my daughter's idol) bit of insipidity.

    <p>I don't know enough about Google and Intel to comment on them, but no one can accuse Red Hat of interoperability failures--the company puts a lot of effort into supporting open standards--or of abusing even the Linux market through market dominance.
    Henrik Moller
    • Damn that missing close-italics tag... (nt)

      Henrik Moller
  • RE: EU emboldened; Who's next on the hit list?

    None of the companies listed, with the possible exception of Intel, are near monopolies.

    So sorry, MS Shills, you are wrong!
    • Yes they are - in the EU, which is the focus of the story

      In the EU, the definition of a monopoly changes. A good or service provider are subject to anti-trust laws once they acheive "dominance," which is 39.7% of the marketshare for that particular good or service under EU law. (easily researched, but I'll help you out here, as I assume you are incapable of performing the simplest of tasks what with your fat-troll fingers: )

      So, actually, yes, all the companies listed are monopolies, over the markets that they would be subject to regulation for, in the EU even if not in the US.

      Now it's you who looks like the shill - or rather the troll who runs around spouting mis-information, even when a simple search of EU law could have easily answered this question for you.

      Hate to be the bearer of bad news, but much as you'd like us all to believe that you know everything about everything, people who do research for a living, like those that compose news stories, probably know more about most things than you do. The real kicker, they probably had to look it up first. A trick you may want to try before opening your trap next time.

      At the moment, it appears that your passion for your savior is overwhelming your ability to be rational on any level. It seems instead that the need to jump to Apple's defence, regardless of whether they even need defending, has taken over completely, and nothing but non-sensical gibberish comes out. Basically, you are making yourself look dumber by the minute (although none of use thought that possible, I'm sure).

      Get help. In a hurry. You're going into Kool-Aid shock. You need a double-dose of reality quick.
  • RE: EU emboldened; Who's next on the hit list?

    Microsoft was fined for illegal business practises that it was able to employ successfully because of its monopoly position.

    Microsoft was NOT fined for a having a large market-share, which would clearly have been ridiculous.

    So it is equally ridiculous to suggest that the Europe will go after other (American) companies simply because of their market dominance. Such xenophobic hysteria does both zdnet and your great country a major dis-service.