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Report: Microsoft trying to settle EC antitrust matters

By | July 7, 2009, 11:31am PDT

Summary: Bloomberg reported on July 7 that Microsoft is attempting to come to a settlement with European antitrust officials over two antitrust matters pending in the European Union. Microsoft officials aren’t commenting on the report. But it’s definitely a believable one.

Bloomberg reported on July 7 that Microsoft is attempting to come to a settlement with European antitrust officials over two antitrust matters pending in the European Union.

Microsoft officials aren’t commenting on the report. But it’s definitely a believable one, given the potentially large fine and far-reaching “remedies” that the European Commission (EC) is believed to be preparing against the Redmond software maker.

The Bloomberg report claims Microsoft is trying to settle the case before EU Competition CommissionerNeelie Kroes steps down at the end of this year.

From the Bloomberg report:

“Any agreement would have to resolve a case over Microsoft’s Internet browser as well as a separate investigation into word processing and spreadsheet software, said the people, who declined to be identified because the talks are confidential.”

The browser case mentioned is the Opera browser-tying case. EC regulators have issued prelimary findings in that matter which have indicated that they plan to come down hard on Microsoft for stifling competiting by tying Internet Explorer to Windows. Opera brought the suit against Microsoft in December 2007.

The EC had been asking hardware makers about one possible remedy — offering users a “ballot screen” via which they’d select which browser they’d prefer to install when setting up a new Windows machine. IE would be one of a number of unspecified options. Microsoft officials have made it clear they are dead-set against a browser ballot and, instead, have announced intentions to offer one and only one version of Windows in Europe (Windows 7E) which would not include any browser or links to any.

The other antitrust matter that Microsoft reportedly is interested in settling involves its Office suite and how Microsoft has handled Open Document Format (ODF) compliance there. EC investigators indicated earlier this year they were studying that issue.

Would a settlement support Microsoft’s Windows 7E proposal or scuttle it? Would it include a fine? No word so far on what’s on the table….

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Topics

European Commission, Antitrust, Microsoft Corp., Bloomberg L.P., Web Browser, Web Browsers, Corporate Law, Microsoft Windows, Internet, Business Operations, Operating Systems, Software, Mary Jo Foley

Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Disclosure

Mary-Jo Foley

Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

Biography

Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

Got a tip? Send her an email with your rants, rumors, tips and tattles. Confidentiality guaranteed.

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RE: Report: Microsoft trying to settle EC antitrust matters
makrejktt2201-24353662080873395391113538372983 11th Nov
qtmiff,good post!
View in thread
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What is US government doing meanwhile?
LBiege 7th Jul 2009
They just let these European sissy socialists get away w/ screwing American companies on all sorts of sorrow butt excuses at every turn? Giving in now, there's no end to it.
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Silly Boy.
SimonUK 7th Jul 2009
Protectionism helps no-one. Your "sissy socialist" message is offensive.
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US government...meanwhile
sdrawdet@... 8th Jul 2009
I believe the US government is doing fine. They seem to know that we, in the US, are smart enough to know that there are more browsers and that it's easy enough to install any one of them.
The EU seems to think that it's citizens don't have a clue and that it will save them and make money at the same time.
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What is the US Governemtn doing???
DaemonSlayer 8th Jul 2009
OUR US government appears to be afraid of M$, turning a blind eye, and overturning wiser judges decisions on M$ anti-competitive actions (possibly for favors.)

REMEMBER that a few years back one US judge was ready to have M$ split into multiple companies. (It WAS the US case where M$ cried to remove IE would be to cripple the OS after they integrated its root deep into the OS) on Appeal, it was quickly decided to overturn the decision (original decision too harsh or judge was paid off, you decide.)

I commend the EU on standing up to M$ (irregardless if it is just a power play for $$$ or for reals open market protection.) My Government, the US, should get a backbone and stop passing laws favoring big business, and decisions that ignore the anti-trust laws/definitions already in place.
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RE: Report: Microsoft trying to settle EC antitrust matters
Loverock Davidson 7th Jul 2009
Here we are again with Microsoft making every effort possible to please the EC. If they reject this next proposal then Microsoft should just pack up and leave the EU to teach them a lesson. When they find they can no longer use their computers they will come crawling back on their knees begging for Microsoft's forgiveness. Then Microsoft can tell them to drop all charges and counter sue the Opera.
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EC Settlement
prof123 7th Jul 2009
You really think MS will abandon Europe with its 300
million population? MS has to play by the rules and the
rules in EU are that pre-installed software (of any kind)
gives its author an unfair advantage. If you think about
it, it actually makes sense. The users should be able to
choose which browser they want as a default, with a
single click...
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At who's expense?
MGP2 7th Jul 2009
The users should be able to
choose which browser they want as a default, with a single click...

And who's supposed to pay to install those browser installation packages? Microsoft? Yeah, THAT'S fair (Not).
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Hmmmmmmm
Viva la crank dodo 7th Jul 2009
I guess the OEM's that usually create their own images with additional packages anyways. Just a thought.
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That's fine....except....
MGP2 7th Jul 2009
...except Opera has already started whining about that solution because (waaah) "we don't have the money to pay OEMs to install our software." They want Microsoft to pay.
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Really?
Viva la crank dodo 7th Jul 2009
I don't remember seeing that. Could you provide the link?

The cost in the end will be picked up by the end users. Now if there is a lower price for the browserless version of windows, the OEM could divert that saving to effort to install the browser. This is not a huge expense as it could be built in to an image.

As for retail versions, I believe that is the problem of the other browsers but I believe someone will come up with a solution.

I disagree with MS tactic of removing the browser altogether due to the EC decision even if it was a valid action.
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Agree with your disagreement
DaemonSlayer 8th Jul 2009
"I disagree with MS tactic of removing the browser altogether due to the EC decision even if it was a valid action."

Agreed. M$ will then cry foul as it "damages" them. OR in the case of leaving it up to the vendors, M$ will probably attempt to discourage OEMs from bundling some other browser than IE. (at least until they get caught at it.)

M$ HISTORY 101:
* Back in the 1990's M$ came up with a "Windows certified" program for software. Catch was software vendors couldn't release the software on another platform (Apple in particular.) During this time frame M$ also pulled Office from the Mac platform.
* M$ has integrated IE into the OS (Windows.) Said removal of IE would cripple/kill the OS. Yet, when forced legally to produce an OS without it, they complied only to the point of producing it, marketing ignored the version altogether just to tell the world "See, nobody wants our OS without a browser."
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They Should be able to choose their own equipment too
windozefreak 8th Jul 2009
So, Apple Inc should be next.
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Odd...
zkiwi 7th Jul 2009
Claiming that EC computers can be shut down at Microsoft's whim?

Whatever.
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What is odd
Loverock Davidson 7th Jul 2009
is that I never said that or implied it. You have a very creative imagination which would be put to better use than making stuff up on zdnet talkbacks.
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Well...
zkiwi 7th Jul 2009
You did, so I guess either you employ a ghost writer or you have no idea what you type.

"When they find they can no longer use their computers they will come crawling back on their knees begging for Microsoft's forgiveness."
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That is what I said
Loverock Davidson 7th Jul 2009
but that is not what you said I said.
  • Flagged
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Another lonely loverock post spotted.
nizuse 7th Jul 2009
Here you go. Some attention for you.
  • Flagged
0 Votes
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And I'd say...
zkiwi 7th Jul 2009
You didn't mean what you meant either.
  • Flagged
0 Votes
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Hmmm....
DaemonSlayer 8th Jul 2009
"If they reject this next proposal then Microsoft should just pack up and leave the EU to teach them a lesson. When they find they can no longer use their computers they will come crawling back on their knees begging for Microsoft's forgiveness."

Sounds like an implication that if M$ pulls out, their (The EU's) computers become paperweights.
0 Votes
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It's a good thing...
SimonUK Updated - 7th Jul 2009
...that you don't work for Microsoft. So you are advocating cutting of the nose to spite the face. Really?! You do realise how stupid you look, don't you? Are you really advocating giving Apple and/or Linux one of the biggest AND most profitable markets in global enterprise for free? Isn't about time that you grew up and stopped suggesting childish things. Why should I be punished? Microsoft may well be judged to have broken the law in the EU - if that is the case then appropriate action needs to be taken and appropriate sanctions must be placed upon them. The same would be true for any other business that trades in EC member states.
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It's a good thing
Loverock Davidson 7th Jul 2009
I know what I'm talking about and you don't. Apple and very much less so linux don't have an opportunity here. Europe needs Microsoft, it will be much cheaper for them to just drop this case than have Microsoft pull out, then the EU come crawling back and Microsoft gets to charge them more. You shouldn't be punished, I agree with that. That is why its your responsibility to contact your government and tell them to stop this madness and drop any pending legal cases against Microsoft. Then everyone wins including you.
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You are contradicting
Viva la crank dodo 8th Jul 2009
an earlier comment where you had said that you love competition. If Linux and Apple have no opportunity, then how is this a good thing to you, a lover of competition?

This is not to say that I would not like to see this resolved with a better solution than 7E, but the solution should not be "MS - Do what you want even if we (the EC) consider it anti-competitive".
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The problem with the *interpretation* of the law...
PollyProteus 8th Jul 2009
...is that it isn't applied equally to every company that provides an operating system.

If Microsoft is legally required to not bundle a browser or anything else, then Apple must also not bundle, and any Linux distros must not bundle.

What's applied to one must be applied to all as *that* is how the law reads and any other enforcement is unjust.

The fact that the EC seems to relish going after US companies with the deepest pockets (Microsoft, Intel and lately Google is on their radar) and not apply the law equally across the board indicates nothing more than corruption and greed.
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On the equality thing...
zkiwi 8th Jul 2009
Feel free to try and get a case started against others that you think are abusing their monopoly positions.

Maybe the Microsoft case will set a precedent on what can and can't be done in general, maybe not.

Up until that happens, please stop bleating about it not being fair.
  • Flagged
0 Votes
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I'll respond from the bottom up.
SimonUK2 Updated - 9th Jul 2009
The EU isn't picking on US business. That comment is protectionist
paranoia wrapped up as misplaced patriotism. The US leads the world
in terms of IT tech, with the majority of monopolies in the various
fields (ie search and OS) being based there. Which leads to the fair
handed Apple/Linux distro comment. To address this, you need to
understand what a monopoly is. A monooloy is defined as a business
with enough control over a particular market that it can dictate the
terms in which all others compete in it, which isn't in itself isn't
unlawful. Leveraging that monopoly is unlawful - it's anti-
competitive.

"What's applied to one must be applied to all as *that* is how the law
reads and any other enforcement is unjust" is absolutely correct -
except if the the party concerned is breaking the law by not
competing on an even keel to begin with. A good analogy is the IOC
banning steroids. Steroids in themselves aren't illegal, however using
them in competition is, because it gives you an unfair advantage to
dominate the event. Microsoft dominated the browser market (still do,
just) because of their dominance of the OS market. The EU are trying
to level the playing field for the consumer and smaller business
to compete fairly. This could be argued that this is favouring EU
business, but I'll ask you this; in what country are the majority of
other browsers producers based?
0 Votes
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RTF
frabjous Updated - 9th Jul 2009
Read the...file, PollyProteus. Saying that, "If Microsoft is legally
required to not bundle a browser or anything else, then Apple
must also not bundle, and any Linux distros must not bundle."
is nonsense.

This is all about an EU action on Microsoft's anticompetitive
monopoly practices. Only Microsoft has a monopoly OS
position, as defined by law (in the EU, US and probably most
jurisdictions) and they have consistently used that position to
favor their own browser (among a number of software items)
and disadvantage competitors. That is what is illegal.
Obviously, no other OS provider can be considered a monopoly
in any current market, so any bundling they do is simply a
marketing issue.
Please think this through.
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And....
windozefreak 8th Jul 2009
One action the company has a right is to move their business if they so desire.
0 Votes
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Once bitten, twice shy; literally. (nt)
Economister 7th Jul 2009
nt
0 Votes
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I can see why MS wants to settle
dfolk2 7th Jul 2009
The idea of using a ballot screen to determine what program the USER wants installed on his computer has the potential to torpedo MS's technique of bundling to take over more and more areas of software functionality. If we can get a ballot screen to determine which browser the USER wants- why not extend that to the media player- why not extend it to other areas of software?
It could be potentially devastating to MS's business model if they could no longer take over areas of software functionality by using their bundling technique. Its easy to see why MS would be scared to death of a ballot screen - they would have to compete on a much more level playing field.
Lets all hope MS does not snooker the EU like they did with the N version of XP, and that the EU insists on a genuine and effective solution to MS's continuing monopoly abuse. We need a solution that lets the best product win, and not let MS stack the deck for the monopoly bundled product. This could lead to companies recognising that they could bring good products to market without having them immediately crushed by MS using the bundling technique. Those companies could elect to put time and money into potential products that they would not put money into at this time, because today they are aware they are playing against a very stacked deck. This could lead to innovation.
0 Votes
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Forbidding the EU from having...
wolf_z 7th Jul 2009
...IE distributed with Windows certainly qualifies as "a genuine and effective solution to MS's continuing monopoly abuse."

After all, no *PRODUCT*, no possibility of abuse, yes? happy

And this is exactly like Windows N because nobody will buy Windows without IE when they can buy it with IE for the same price...oh, wait.

MS *REFUSES* to sell the EU any copy of Windows that has IE bundled in it. Guess you're stuck with the "E" version. You want real Windows 7 you'll have to install IE yourself. (snicker)

Wonder what excuse Opera's going to snivel about when they still can't give Opera away. Unlike say, Firefox, which seems to be doing quite well.

This is going to make the EC look like even bigger idiots. Couldn't happen to a more deserving bunch of greedy politicians.
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I'm sorry...
SimonUK 7th Jul 2009
...but your suggestion will make Microsoft look petty. There is growing ill will towards them in the EU and punishing the consumer would further alienate them. The right thing to have done would have been to comply with competition law in the first place.
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It's not a "suggestion"...
wolf_z 8th Jul 2009
...it's what MS is going to do. happy

They will not sell Win 7 in the EU, only Win 7 E. They've flatly stated this. Since the EC insists it's illegal for them to include IE with Windows they won't.

Note it's probably illegal for the EC to force MS to include this ballot screen, I can see a huge fight over that--especially now that MS has pulled IE completely.

Any backlash will be carefully guided by MS back to the EC where it belongs.

Frankly, the thought that all this money is being wasted fighting over a *free* product is the very definition of government ineptitude. The Office action (which is just now rearing it's ugly head) makes a vague kind sense, since there's real money involved and thus a real marketplace. IE, not so much.

Windows N made a big difference in the market for media players/streamers didn't it? Demonstrating the complete cluelessness of the EC. Even if they win on the ballot screen (a very big if) they'll just open a huge can of worms about which browsers can be on the ballot. In the end it won't help Opera in the slightest.

Antitrust law in general makes little sense, usually because the government was the one who set up the monopoly in the first place (AT&T for instance).
0 Votes
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It sounded like he used the word sarcastically
Wintel BSOD 9th Jul 2009
So I suggest you lighten up.

happy

Antitrust law in general makes little sense, usually because the government was the one who set up the monopoly in the first place (AT&T for instance).

Uh, they only forced Ma Bell to break up back in 1984. The government didn't actively help or "set up" anything to benefit Ma Bell at all.

However I wouldn't mind seeing the government look over M$ shoulders. Since they insist on controlling 90% of the world's desktop market, then I think it's only fitting the government treat them like a public utility to be regulated and observed.
0 Votes
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Thanks for that...
SimonUK 10th Jul 2009
I think it was lost on him...
0 Votes
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Windows N failed because...
DaemonSlayer 8th Jul 2009
M$ WANTED it to fail, to say "I told you so, now shut up and let us sell it the way we want to." M$ kept Windows N quiet, didn't say a word marketing wise before or after its release. A Planned failure, just to justify their bundling.
0 Votes
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WEll,...
windozefreak 8th Jul 2009
It's their product!
0 Votes
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Yeah, but you MISSED the point
DaemonSlayer 9th Jul 2009
They produced it (Windows N) to comply with the EC rulings. THEN the intentionally set it up to fail just to be able to say "IN YOUR FACE, EC! We TOLD you So!" They only did it to shut the EC up, and then to rub the integrated OS in the face of the EC as it was the "preferred" product. (Who knows what all tactics used to make sure Windows N failed: priced it higher to give a distaste to OEMs, fail to advertise it, etc. Nobody will buy what they don't know exists.)

Yes, it's their product. But you missed the point, and ignored their under-handed manipulation.
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Sounds to me...
MGP2 7th Jul 2009
...like you're trying to say Microsoft should be made to install competitor's browsers with Windows packages. Would you also force McDonald's to sell Whoppers and Burger King to sell Big Macs?
0 Votes
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Wrong argument.
nizuse 7th Jul 2009
What's 'fair' is not relevant. At issue is compliance with EU law. And MS broke the law (again btw) so now they will see some consequences for that.

Whether you thing the EU law is fair, or EU's judicial process is fair, is not relevant. Of course people have a right to speak out what they want. But eventually it's whining, and complaining. Go raise an army I would say, and invade the EU if you want to change the law there.

0 Votes
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Bad laws breed contempt for all other laws
sboverie 8th Jul 2009
When laws are seen as arbitrary then the laws get ignored. From what I gather from other posts and comments is that the EU is targeting MS specifically for problems other OS vendors do as well.

Win7E is the response to badly written laws. It is weird to expect MS to add their competition's applications to Win7. Why not force Apple to install IE on computers sold in the EU?
0 Votes
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Really?
zkiwi 8th Jul 2009
And here was me thinking that the right thing to do would have been to wait for the EC ruling rather than toss out 7E as a remedy.

Also, you're being very presumptive about EC rules/regulations/laws being arbitrary. They're not. They've been in place for years and have been tried and tested.
0 Votes
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Arbitrary
sboverie 8th Jul 2009
Interesting you think that I am saying EC laws are arbitrary when I did not say so. I said arbitrary laws tend to get ignored, not saying what specific laws or law generating institution.

My point is good laws that are enforced fairly help make people more law abiding. Bad laws that are zealously enforced have the opposite effect.

I would think the right thing to do is to have one law that is enforced for all instead of having exceptions. If bundling applications and browsers is wrong for MS then it should be wrong for other OS vendors; If this was a tried and tested rule/regulation/law that has been in place for years.
0 Votes
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Well, I'd say that they are being...
zkiwi 8th Jul 2009
Applied equally and fairly. After all, I'd expect the EC to be going after any and all monopoly position organizations that were illegally leveraging their market position.

If you think that "hat" fits others, then go for it. Go get a case started against them. Be an activist.
0 Votes
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Not at all arbitrary
frabjous 9th Jul 2009
Please, please read the article before making foolish comments
about "everyone should be the same." Again, this is a case about
Microsoft using their OS monopoly position for illegal,
anticompetitive actions, like browser choice. No other OS vendor
has such a monopoly position and therefore are not breaking the
law--MS is, and there are consequences.
0 Votes
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China's rules has been in place longer than EU
windozefreak 8th Jul 2009
Maybe you want to move to China?
0 Votes
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????????
zkiwi 8th Jul 2009
I guess you'd go for ancient Bablyon as opposed to China.
0 Votes
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Or,...
windozefreak 8th Jul 2009
Let, or will Microsoft to pull out. Period.
0 Votes
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McDonald's...
prof123 7th Jul 2009 

If Mcdonald's had 95% of the burger market and Burger 
King couldn't open an outlet because McDonald's owned 
all the real estate, then yes... something would have to be 
done and McDonalds might have to be forced to sell 
Whoppers...
0 Votes
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Let's take it a step further and out of the software market
Capt_Caveman 8th Jul 2009
Why not have a "ballot option" for your new Mercedes where you can customize it with whatever radio you want, tires from the manufacturer you want, a choice between competing company's motors (GM would love that about right now), etc.

Folks, it's a slippery slope we're heading down with this whole discussion. Today it's software because it's easy. Where does it end though?

Last thought - is this really about consumer choice? I think the European consumers are pretty savy from a technical perspective. So I don't buy that argument. Personally, I think the end goal to this whole thing is protecting the market and revenue generation (through fines) for the EU. After all, who can pass on all of that free money? . . .
0 Votes
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EC Antitrust laws are not about...
PollyProteus 8th Jul 2009
... protecting the consumer, they're about protecting "competition", that being other companies. Consumers are not the focus or the reason for EC antitrust laws.
0 Votes
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RE: Report: Microsoft trying to settle EC antitrust matters
makrejktt2201-24353662080873395391113538372983 11th Nov
qtmiff,good post!

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