Microsoft antitrust oversight and a changed market

Judge Kollar-Kotelly announced yesterday that she would extend to November, 2009 the non-documentation related sanctions imposed on Microsoft in its 2002 consent decree, matching the extension of the documentation provisions she had made earlier in the month. The extension isn't of the duration for which the State Attorneys-General had hoped - they favored a five year extension - but it is still notable. Reading the subtext, Kollar-Kotelly is saying that Microsoft hasn't done everything expected of them, but they aren't as delinquent as the States had argued.

The States argued that the fact that Microsoft is still dominant five years after the signing of the consent decree is sign the sanctions didn't work. I think the notion that Microsoft's dominance -- a dominance derived from the software markets need for standards,  however derived -- is laughable. However, there are signs that trends are heading in useful directions. With Firefox market share in Europe at 28% as of December, 2007, a resurgent Apple, and a Google that regularly bests Microsoft in Internet applications, I should think that Microsoft's ability to dominate the industry is a thing of the past, as Ars-Technica noted (albeit in a non-committal third person):

The relevance of the consent decree sanctions is somewhat questionable under current market conditions. Apple is enjoying record market share growth, Google's popularity bests Microsoft in the increasingly important search space, and Mozilla's Firefox web browser continues to take market share from Internet Explorer. One could argue that innovative business models—like those which leverage Internet advertising and open-source development—have done far more to level the playing field for competition in the technology market than the US antitrust case against Microsoft.

2007 is not 1995. Today, computing power is ubiquitous, and the Internet is an ever-present distribution medium for products. Though the manner in which the Internet has shaken up the media industry might generate the most press, the change it has had on software is equally pronounced. A pre-included browser in Windows is being beaten in the market by a product that people must download to use. That shows that people aren't just smarter about their computing experience than some might give them credit for, but are willing to take responsibility for their computing environment into their own hands.

Quality matters, and clearly, Firefox is a quality browser. I also think that Firefox's success says something critical about the changed nature of the relationship between companies (or individuals) that create software and the people that use those creations. Closed or undocumented protocols simply are not acceptable anymore. Computing is now such a critical component of our daily lives that we no longer allow companies to lock users into a particular platform or application.  Microsoft's shift to XML-based document protocols is a long-running effort, and I know many of the companies I worked at prior to Microsoft wanted XML-based formats in order to more easily integrate office automation documents into enterprise management systems.

Antitrust authorities around the world have used the regulatory cudgel to force Microsoft to open up up by documenting the protocols and technologies they use in their products. To my mind, however, that's like forcing people to wear seatbelts or drive cars with windscreens. If Microsoft had failed to open up, I think Microsoft's position would be a lot more precarious, however paradoxical that might seem, because consumers are far more sophisticated than they were in the 1980s, and the market HAS changed.

Trends at Microsoft seem to be heading towards documentation of protocols developed internally, standardization of that protocol, and to a certain extent, use of standard protocols created by outside parties. Granted, Microsoft may not use standard protocols as much as fans of open source might like (Microsoft tends to make a lot of their own, which isn't a bad thing, IMO, as competition in protocols is as important as competition in applications), but on the other hand, so long as Microsoft has documented its own protocols, opportunities for real competition exist.

There are deviations from that norm. Personally, I think the managers who approve partially closed systems should be forced to wear yellow jumpsuits for a year (I think the cost of such a closed system in terms of poor sales will reveal itself in the near future, so those managers will pay a price, albeit indirectly), but I'm not in a position to mandate such things. But don't assume that Microsoft is free to impose whatever protocol it wants on the industry. From audio (MP3, WMA) and video (VC-1, H.264) standards to Internet development frameworks (Silverlight, Flash) to document formats (ODF, OOXML) and whole applications (IE, Firefox; Media Player, iTunes), Microsoft faces real competition on many fronts.

The market has changed, and the agents of that change are the success of personal computing and the growth of a global network through which products can be distributed. Though antitrust authorities might have started the documentation ball rolling, I think the momentum will sustain itself given new market expectations.