Microsoft accused of anti-competitive behaviour

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Proponents of MPEG-4 are decrying Microsoft's new licensing fees for rival technology, saying that the pricing poses unfair competition and threatens consumer choice. In a first-ever move for Microsoft, it set pricing this week for licensing of its audio and video compression technology, or codecs, for use on non-Windows operating systems. The company says it will charge 10 cents per decoder, 20 cents per encoder, and 25 cents for both. In comparison, MPEG LA - a consortium of companies holding patents attached to implementations of the MPEG-4 standard - charges 25 cents per encoder and decoder, or 50 cents for both - a fee structure finalised in November. MPEG-4 is an emerging standard for the delivery of digital media on PCs, DVDs and consumer electronics. By undercutting the price, critics say, Microsoft is threatening the industry's natural tendency to migrate to open standards that allow many companies to work together seamlessly to service mass media with better choice. MPEG-2, for example, MPEG-4's predecessor, is the standard currently used by most digital cable providers and DVD manufacturers. Elliot Broadwin, chief executive of iVast, which sells digital media delivery software based on MPEG-4, said: "Is every camcorder going to have a Windows logo on the side of it, or is every DVD going to play back in Microsoft Windows Media format? "The interest of consumers is best served when they have choice - which is exactly what open industry standards, like MPEG-2 and MPEG-4, are designed to provide." Microsoft "politely disagreed" with iVast's claims. Michael Aldridge, lead product manager for Windows Digital Media division at Microsoft, said: "Lowering and removing licensing barriers is not only great for the consumer electronics and software industries, but also offers consumers the benefits of better quality video at smaller file sizes." He cited the benefits of a potential personal video recorder that could store two times more TV programming than MPEG-4 using Windows Media 9 Series. "How are these benefits bad for consumers?" Still, the outcry is part of an intense war not only for customers on the PC but also for manufacturing mobile phones, PDAs, DVDs and set-top boxes. Codecs help reduce the size of bulky digital files by removing data that won't be missed in the translation and are considered key to developing new video services over the internet and wireless networks. Companies, including Microsoft, RealNetworks and Apple Computer, have developed advanced codecs to take advantage of the widening adoption of digital media, with quality improvements at each step of the way; and all the companies are jockeying for dominance in PC and non-PC markets. But while Microsoft is pushing for adoption of its proprietary technology by consumer-electronics manufacturers and content owners, Apple and RealNetworks have turned to support of MPEG-4. Stefanie Olsen writes for News.com