Despite the settlement in 2001 of the U.S. antitrust lawsuit against Microsoft Corp., the European Union is continuing its attack on the software firm. In the U.S. case, Microsoft was allowed to continue “tying” — or combining — new software into its Windows operating system.
But in the ruling released last week, the European Commission — which enforces EU regulations — “not only declared the software company an abusive monopolist, but levied penalties designed to prevent similar abuses in the future,” reported the New York Times. “The ruling orders Microsoft to sell two versions of its Windows operating system to manufacturers of personal computers … . One version must remove Microsoft’s audio-video playing software, called Media Player. The ruling ordered the company to produce the alternate version within 90 days.”
Microsoft was fined 497 million euros (about $613 million). Microsoft is appealing the decision.
This is the computer equivalent of ordering automakers to sell cars without transmissions, which then could be bought from another company.
“The commission’s ruling also forces the company, within 120 days, to divulge previously proprietary information about the way Windows works in order to allow rivals the chance of making software suitable for Windows users,” the Times reported.
Why don’t they also order U.S. automakers or pharmaceutical companies to divulge their proprietary business information? Companies spend billions of dollars on research and development. To mandate that they open their discoveries to the world would decrease their incentive to invest in new products in the future.
Robert Levy, senior fellow in Constitutional Studies at the Cato Institute, said the lawsuit in Europe, as with the federal lawsuit in the United States, was instigated by Microsoft’s American rivals, especially Sun Microsystems. “The EU ruling sends the following message,” he said: ‘ “If you don’t make it in the marketplace (selling your product), go to the federal government. If that doesn’t work, go to the state governments, then the Europeans, then to Japan.’”
He said countries should respect the antitrust rulings of one another concerning home companies, in this case the U.S. federal actions because Microsoft is a U.S. company.
We would add that the U.S. government under the Clinton administration should continue to be blamed for starting the antitrust roller coaster moving in the first place against Microsoft in 1998. The EU action — which we hope is overturned on appeal — might never have happened without the U.S. action. And the EU action now could well hurt any American company that does well in the international marketplace.