October 25th, 2007

Poll: Is Microsoft still dangerous?

Posted by John Carroll @ 9:37 am

Categories: Antitrust, Microsoft

Tags: Sanction, Web, Antitrust, Microsoft Corp., U.S. Department Of Justice, Standards, Corporate Law, Quality, Linux, Channel Management

The sanctions imposed on Microsoft as part of its settlement with the DOJ and the States (and subsequently ratified by Judge Kollar-Kotelly) are set to expire in November. This has led to a difference of opinion between America’s Department of Justice, the federal agency tasked with enforcing American laws at the federal level, and the state Attorneys-General. The DOJ doesn’t believe that the necessary standards have been met to justify extension. The states (or at least 10 of them) believe further oversight is warranted.

The states use a “results” standard to support ongoing oversight, arguing that the 90% market share is proof that the sanctions have not worked (echoes of similar logic used in past statements by the EC, though Ms. Kroes did later backtrack from such statements). They also feel that the continuing dominance of IE gives them leverage to block web standards and thus prevent the development of competitors to their core businesses.

To put it mildly, I think their frame of reference is still stuck in the mid-1990s. Who DOESN’T test their web applications under Firefox these days, and what is the AJAX phenomenon if not an attempt to replicate the interactivity of desktop applications using standards-based web technology?

I could go on, but the closing paragraph of an article on Ars Technica explained the situation so much better.

With Firefox market share rapidly climbing and major hardware vendors like Dell selling computers preloaded with Linux, it seems like present market conditions no longer provide Microsoft with the leverage it needs to impede innovation. The California group has already admitted that the efficacy of the sanctions is somewhat questionable. At this point, it seems like radically innovative business models—like those used by open-source software and Web 2.0 companies—are doing more to equalize competition. If the function of antitrust is to promote competition and not merely to punish companies for market dominance, then the position of the New York and California Groups seems overzealous. The decision of the US not to ask for extensions seems both reasonable and unsurprising.

Microsoft is unlikely to want to step into the antitrust tar pit anytime soon, so I somehow doubt that they are, say, going to penalize Dell suddenly for shipping Linux products. Microsoft would quickly attract unwanted DOJ scrutiny were they to do that, not to mention scrutiny from any number of antitrust hotspots around the world (Southern California isn’t the only place with barely controlled brushfires).

So what do you think? Can Microsoft still use its market power to do mischief, or has the land shifted so much in the last decade that they must truly scramble to maintain their position?

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