Will the EC’s Watchful Eye Hobble Microsoft’s Ability to Innovate?

By  |  Wednesday, December 16, 2009 at 11:05 pm

Microsoft may have settled its differences with the EC over the antitrust complaint Opera Software’s levied against it, but I do not expect that the European Commission’s scrutiny of Microsoft will lapse. I just hope that the EC is judicious in exercising its regulatory authority against the company in the future.

Opera filed a complaint with the EC in 2007 alleging that Microsoft illegally bundled Internet Explorer with Windows. That complaint was settled today when Microsoft and the EC came to an agreement over a browser ballot for Windows that lets the end users choose which browser they would like to use as their default.

The EC has changed Microsoft’s behavior–for better or worse. It has levied approximately $2.3 billion in fines against the company following its landmark 2004 antitrust ruling, where it was found to have abused it dominant market position. The EC has likewise compelled Microsoft to share information about its products, and to modify Windows in Europe.

I believe that those actions helped bring about the innovation that is happening in the development of Web browsers today, but at the same time, I cannot downplay the impact that the innovative work of Google, the Mozilla Foundation, and others have had on the industry. The EC also instigated Microsoft to be more responsive to customers’ requests for greater interoperability.

After much soul searching, Microsoft is now willing to embrace open source software when its business objectives are being met. The same goes for its new found emphasis on interoperability– its biggest customers wouldn’t have it any other way. Embracing cross platform scenarios has become a business opportunity for Microsoft. Innovation and standardization on the Web has changed the competitive environment.

With that change underway, the question is where the EC’s oversight should go from here. If Google is able to tie its browser into Chrome OS to rapidly bring users to its Web properties, why can’t Microsoft? It cannot chart the same source as Google, in part because it is a convicted monopolist, and Windows is still practically everywhere.

If and when Microsoft does attempt to leverage Windows in new ways, its actions will be heavily scrutinized. It could preempt further antitrust action by making features such as the browser ballot a default part of Windows.

The EC should keep its powder dry unless Microsoft is clearly in the wrong (and then be punished severely). As the industry continues to innovate, Microsoft should contribute significantly to the development of new technologies. I just hope that the EC realizes that Microsoft can play a constructive role in the industry.



8 Comments For This Post

  1. Bouke Timbermont Says:

    “If Google is able to tie its browser into Chrome OS to rapidly bring users to its Web properties, why can’t Microsoft?”

    I had this discussion with many Americans so far, and it seems this is one thing Europeans and Americans can’t agree on.

    the difference is that Microsoft has a 95% market-share with Windows. Having such power in consumer browser-choice requires greater responsibility and different rules than for an OS that isn’t even released yet.
    I found many Americans find this is “not fair” towards MS because competitors play by different rules, but srsly, are you going to defend the company that chocked the internet to near death with IE6? Ever since that dark age of the internet, MS lost the “a completely free market automatically leads to inovation”-card.
    And even without that history, you can’t say that without the EC MS would be on the same level of playing-field as competitors if it force it’s own browser up on 95% of the market: we all know a pre-installed browser will be the browser of choice to most less tech-savvy users, which btw usually use Windows.

    One last note: the IE-case of the EC is the only thing that forced MS to make IE removable in W7, something MS said for a long time “couldn’t be done” because of “the deep and technically required bonds between the OS and the browser”. Something that was possible btw with all alternative OSs 😉

  2. IcyFog Says:

    Microsoft hobbles itself by producing inferior products more than the EC has ever done. The company’s strong-arm tactics is the only reason why its products are so pervasive. It has nothing to with brillant or innovative technological ideas.

  3. tom b Says:

    IcyFog nails it; MSFT never innovated BEFORE its antitrust problems. If they don’t in the future, it’s not primarily the regulator’s fault.

  4. Esteban Says:

    Did you just use the words “Microsoft” and “innovate” in the same sentence? That’s a first.

  5. Stephen Says:

    Do you mean copy? Microsoft is not exactly known for innovation now is it? The EC has nothing to do with it!

  6. avro Says:

    In the last 6 months we have see Microsoft involved in the XML scandal, lifting code from the GPL and most recently the Plurk code theft.

    Microsoft innovation = Copy + Paste

    The words of Robert X Cringely back in 2006 seem more true now than ever.

    “The other attribute that Microsoft has historically lacked is ethics, which also comes directly from the cult of Bill, with its infinite shades of gray. Microsoft has to this point generally thrived by stealing technology from other companies. But now it is at the point where there isn’t that much left to steal, so Microsoft is faced with operating in a whole new manner — actually inventing stuff. This requires discipline — not just discipline to do the work, but discipline not to backslide and steal a little of this and that when the going gets rough.”


  7. David Worthington Says:

    Hey, I won’t deny that Microsoft has hit the copy button and overused the word “innovate” on far too many occasions. That sets me off too.

    At the same time, I like a lot of the work it has done with Live Maps/Virtual Earth, Bing, SQL Server, the .NET Framework, and in co-developing new standards such as WS-*.

    It’s a mixed bag, but Microsoft has a lot of talented, smart people working for it. It can make compelling products when it has to compete.

  8. avro Says:

    Zune, Windows Mobile, Windows ME, Windows Vista?

    Mind you the mice and keyboards are good. 🙂

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