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Monday, June 29, 2009

Admittedly, while I have never been a fan of the EU's antitrust policies, I was further disheartened by their reaction to the latest case against Microsoft. First, I'd like to reiterate a key difference between EU and U.S. antitrust policies pointed out by George L. Priest, professor of antitrust law at Yale Law School:

U.S. antitrust laws condemn practices that are "in restraint of trade," which has been interpreted to mean harm to competition. The European Union, in contrast, condemns practices that constitute "abuse of a dominant position."
Essentially, the EU will punish companies for producing a product desired by a majority of consumers (or as I will demonstrate, what they simply perceive to be a majority), and they do this in the name of "competition," regardless of merit.

In response to the EU's latest antitrust claim against Microsoft's bundled software, the company announced it will not include Internet Explorer as pre-installed software with its upcoming Windows 7 release in Europe. End of story, right? Wrong.

According to EU regulators, "Rather than more choice, Microsoft seems to have chosen to provide less." The regulators want Microsoft to provide an option to choose between an included offering of several browsers, particularly browsers built by competing software companies.

One of the companies leading the EU's antitrust push is Norwegian-based Opera. The company's CTO Wium Lie has stated, "We are very disappointed. I don't think what Microsoft announced is going to restore competition. I don't think it's going to be enough, I don't think it will get them off the hook."

According to which source you use, Opera currently controls .72% to 2.2% of the global browser market. By comparison, Internet Explorer holds 41% to 65.5% and Firefox has continued its climb, ranking between 22.51% and 47.7%. With some sources ranking Internet Explorer's market share at less than 50%, you would think the EU wouldn't have much of an antitrust case even under their own anticompetitive laws.

Several years ago, I downloaded several browsers, including Opera, to decide which browser I like the best, and I chose Firefox based on its merits. While not including IE with Windows 7 will not imporve Opera's standings, offering the chioce between IE and Opera will also not improve its market share. The browser simply cannot compete on its own merits so it wants to force Microsoft's hand. You cannot encourage competition in a free market by force (except in the extenuating circumstances such as monopoly - which Microsoft is not).

The fact of the matter is any computer user with Internet access around the world can choose for themselves to download any web browser, including Opera, for free. The EU should not interfere in this matter because competition already exists.


In a similar European matter, Ofcom, the independent regulator and competition authority for the UK communications industries, wants to mandate BSkyB to offer its premium sports channels at "regulated prices" to other television broadcasters as the "most appropriate way of ensuring fair and effective competition." Sound familiar?

Apparently, Europe no longer believes in companies holding a competive advantage over other companies - a sombering development.

Posted by Eleutherian

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