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Wednesday, July 19, 2006

The new XYZ

If you are a fan of antitrust law, perhaps you've been following the EU's antitrust suit against Microsof (LA Times), the new XYZ affair. The suit concerns MS's operating system, its inclusion of the successful Windows Media Player, and the company's alleged reticence about interoperability information necessary for the functionality of rival software.

On July 12, 2006, the EU levied a $357 million fine for failure to abide by a 2004 order. The 2004 order levied a $613 million fine and required MS to sell of version of Windows without Media Player and share communications code with its rivals. Not surprisingly, few were interested in Windows sans Media Player, Windows XP N.

The fun does not stop there, according to the LA Times,

The EU Competition Commission said the software giant would face additional fines of $3.82 million a day, beginning July 31, unless it provided "complete and accurate technical specifications" for software developers who create products that must operate with Windows on PCs and server computers that operate networks.

Some analysts doubted whether fines alone would change Microsoft's tactics. Based on the company's 2005 earnings, for instance, Wednesday's fine amounts to about 11 days' worth of profit. Microsoft earned enough to cover the proposed daily fine every two hours and 45 minutes.



One would think with the success ofLinux, and Apple's operating system, Mac OS X, the EU would leave Microsoft alone. OS X is far from open-source, and Apple doesn't play nice in the sandbox with other companies. But its not the size of a company, or its market influence that really concerns the EU:

Some industry experts, though, regard the EU move as little more than protectionism.

"If Microsoft were a European company, they'd be getting subsidies from all the governments and protection against competition," said Jeff Tarter, founder of U.S.-based industry newsletter Softletter. "This is why European software companies are on their last legs."

They should remember who won the war," he added, referring to World War II.



Granted, giant corporations are not necessarily the best for society. Still, I don't think MS ranks up there with the dehumaninzing corporate giants of the Global Economy, Billy's condom-throwing, pimping, charitable foundation aside.

Here's a timeline of EU's antitrust action (Technology Review).

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