In a submission to the European Commission, the Globalisation Institute claimed the lack of choice in desktop operating systems is a more central issue than that of bundled media players--the issue that sparked the Commission's antitrust action against Microsoft.
Alex Singleton, the Globalisation Institute's president, wrote in the submission: "The vast majority of computers sold are commodity products. While manufacturers compete on styling and brand reputation, in addition to specification, no manufacturer or component manufacturer is the sole choice for consumers. There is no reason why there should not be diversity in operating systems, too."
Singleton suggested most people are unable to easily purchase a computer without automatically paying for Windows. "The result is that consumers who, given the choice, would opt for a cheaper operating system, find themselves automatically buying the market leader," he said. "There is no meaningful competition between operating systems for commodity computers."
He said the institute's analysis excluded Apple's OS X because the Mac is a "premium, niche product, like a Bang & Olufsen television, which is difficult to justify in the business world outside of the publishing sector".
He wrote: "Microsoft's dominant position is not in the public interest. It limits the market and has slowed technical development to the prejudice of consumers. Yet operating systems are not a natural monopoly. Just as evolving standards in hardware allow the combination of competition and compatibility, in a competitive operating-system market, there would be broad compatibility between different competitors' operating systems. Competition would encourage open standards and interoperability, as vendors would, for competitive reasons, want their products to interact with other vendors' products."
Singleton claimed the Windows monopoly "imposes an extra cost on virtually every EU business", due to the lack of competition, as well as higher support costs associated with Microsoft's platform.
The institute examined several options for breaking Microsoft's monopoly but settled on the so-called "naked PC" option because offering customers a choice of bundled operating systems would be logistically impossible on the high street, and offering a rebate to customers who choose not to activate Windows when they first fire up their new purchase could be bureaucratic.
He wrote: "We decided that the best way to approach competition was simply to insist that operating systems are purchased separately from desktop and laptop computers. Price-conscious consumers, including many students, would opt for cheaper operating systems. We do not believe this would add complexity for consumers. Consumers would simply be asked to insert an operating system DVD when they first turn on a new computer, which would then automatically configure itself."
Neither the European Commission nor Microsoft could offer comment on the institute's proposals at the time of writing.