Antitrust frustration

The notion that the South Koreans, who are the most Internet-savvy consumers in the world, are unduly influenced by the pre-inclusion of IM and media handling software in Windows is ridiculous.

I see some scope for antitrust, assuming the people involved in enforcing the rules understand the meaning of proper limits, and don't view antitrust as a flexible club with which to beat large companies into any shape they think conforms to some imaginary vision of perfect competition. For instance, protocol-opening rules fall into the domain of acceptable regulation, and if you were to ask me whether or not Microsoft should just "knuckle under" and meet the documentation demands of the European Commission, I find it frustrating that Microsoft must fight for the right to include what they want in the products they design. many familiar with the dim view I take of antitrust might be surprised by my answer.

Deciding what can or can't be included in a product, however, is clearly beyond the pale, moving beyond mitigation of market power into the realm of market design. Though my past parody of the South Korean antitrust decision exaggerated things somewhat, the principle that vendors have a right to decide what is included with their products is, to my mind, a foundation principle in the notion of property rights. If government shouldn't be able to use eminent domain to buy up housing at bargain basement prices in order to sell it on to well-connected developers so as to improve the tax base, why should they have the right to design software created by PRIVATE companies?

The South Korean decision demands that Microsoft create versions of desktop Windows stripped of IM and media handling software, a market that Windows clearly dominates. Less logically, in my opinion, they also demand that Windows Media Services be removed from Windows Server operating systems, a product which does NOT dominate the server marketplace. The theory is that the inclusion of these products skews the market by making consumers less likely to consider alternatives.

That might make sense if PCs were mostly used by Appalachian farmers miles from an Internet connection. When downloading software isn't a possibility and getting to the Best Buy involves driving down a road that passes by the home of "mad dog" Jethro with a thing for shotguns and moonshine in a rusted pickup truck that has mice living in the exhaust pipe, pre-installs may shape the kinds of things you have on your computer.

Of course, the products in question - IM and media playing - make little sense without an Internet connection, so clearly, anyone who would use them at least has the option to download an alternative. Furthermore, we're talking about South Korea, a country with the highest level of broadband penetration in the world, the highest bandwidth (50 m/bit connections are relatively standard), and highly Internet-savvy consumers.  And frankly, the demand to unbundle products from Windows Server makes no sense at all, as a server admin who can't install third-party media handling products probably shouldn't be allowed into the server room.

Given these market characteristics, I'm dumbfounded, flabbergasted, and dare I say it - hornswoggled - that the Korean Fair Trade Commission (KFTC) concluded that pre-inclusion of default software so skews the marketplace that alternatives don't have a chance to gain traction.

It ignores the fact that Microsoft's IM software is NOT the dominant IM client. That honor goes to AOL's AIM product. Clearly, MOST people have been motivated to get another IM client even though a Microsoft variant comes pre-installed with Windows...

...and for all those who lament the pre-inclusion of Internet Explorer, it's worth noting that if IE WASN'T pre-installed, most people wouldn't be able to download all that IM, media playing, or even alternative browsers such as Firefox. In other words, if IE wasn't pre-included with Windows, the market for software - including open source software targeted at desktop computers - might actually shrink. Talk about sucking the air out of a market.

I'm a Microsoft employee. Clearly, I prefer Microsoft technology, which was one of the reasons working for Microsoft sounded interesting when the opportunity arose last May. Even so, I only use Microsoft technology if I consider it to be better.  I still use Google Maps, even though Virtual Earth has interesting features (that may change, depending on my experience with the new beta). I still use Yahoo mail as my primary free email client. I use Google search even though MSN Search exists. I use Yahoo IM over MSN Messenger because it has better smilies and higher quality video. And for my media playing, I favor WinAmp over Media Player, mostly because of all the free radio channels I get through the WinAmp client.

I use all that non-Microsoft software, and I'm a "biased" Microsoft employee. Imagine all those non-Microsoft employees who have 50 m/bit Internet connections and who use the Internet more than they watch television.

The mere notion that such consumers are somehow so skewed by the mere inclusion of a software default that competitors can't gain traction is RIDICULOUS...

...and that's why I find it frustrating that Microsoft must fight for the right to include what they want in the products THEY DESIGN.