Microsoft Slams the EU Commission
I just ran across the clearest description of the idiocity of the EU commission that investigated Microsoft (echos a lot of the very things I have mentioned previously). It's a seven page paper written by Microsoft's legal team and it is extremely well written and extremely interesting. I highly recommend checking it out. Just a sample:
“...First, despite Article 82(d)’s explicit focus on "commercial usage," the Decision essentially ignores prevailing commercial practices among suppliers of similar finished products. All other contemporary operating systems, such as Apple’s OS X, similarly tout their integrated media capabilities. The Decision expressly rejects (Para. 822) the principle that tying analysis for finished products should focus not on whether there exists a separate demand for a component but on whether there is any demand for the finished product with that component missing. For example, the fact that there is a market for shoelaces does not mean there is a market for shoes that have their laces missing. Common sense dictates that it would be misguided for regulators to require shoes to be sold in such a manner, even if this would create greater opportunities for companies that sell shoelaces. 1 The Decision goes on to dismiss the fact that all other operating systems also come with media playback software, ostensibly because some (but not all) of these finished products incorporate media players developed by other suppliers. (Para. 822.) Yet the demand for finished products clearly does not turn on who developed individual components (indeed, most of the time consumers are unaware of who created which component anyway). The Decision’s approach would undermine commercial practices in a wide variety of industries. 1In effectively rejecting this approach, the Decision departs from the Commission’s own Vertical Guidelines, which states that "since customers want to buy shoes with laces, it has become commercial usage for shoe manufacturers to supply shoes with laces. Therefore the sale of shoes with laces is not a tying practice." Second, the Decision bases its tying analysis not even on a distinct component that any firm provides on a separate basis, but rather on a single capability of that component. The Decision acknowledges Microsoft’s point that it started integrating media playback functionality into Windows in 1992, well before RealNetworks was founded. (Para. 814.) It nonetheless asserts that Microsoft violated the law in the late 1990s when it improved the media playback functionality in Windows by adding streaming capability, because in doing so "it matched other vendors’ products in the essential functionality that many customers came to expect from a media player." (Para. 816.) Such analysis effectively means that a dominant firm can integrate a new component into a finished product, but not if the Commission concludes – five years after the fact – that the component has a feature that "many consumers" decided were attractive and important. No business can make product design investments based on a standard that is so vague and that penalizes efforts to provide consumers with features they find attractive...”