Financial Daily from THE HINDU group of publications
Tuesday, Dec 28, 2004
Financial Daily from THE HINDU group of publications Tuesday, Dec 28, 2004 |
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Info-Tech
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Courts/Legal Issues Will the Windows now remain wide open? Batuk Gathani
Brussels , Dec. 27 GLOBAL software major Microsoft losing its appeal at the European Union's Court of Appeal has unleashed a major debate about the pros and cons of "semi-monopolistic" trading in the background of consumers' interest. The European court's decision is rated as a major achievement for the European Union's former Minister for Competition, Mr Mario Mo, whose sanctions against Microsoft have survived the latest European Court challenge in Luxembourg; but the court is yet to concede that the imposing of the monopolistic penalties by the European Commission might cause serious and irreparable damage all round. Microsoft has stated that it prefers a "negotiated settlement to a continuing legal battle" and, according to EU officials, there is no reason for the European Commission to back down. Either way, the court decision is hailed as a major milestone and there is speculation about the future course of events and the likely strategy adopted by the European Commission and Microsoft. The emerging perception is, "Windows will now remain wide open." The software company has been ordered by the judge to comply with a European Commission anti-trust ruling that instructed Microsoft to change the way it sells its Windows operating system in Europe. The 91-page decision by the judge of the European Court also raises questions about some of the arguments submitted by the European Commission. All this may provide a legal back-up for Microsoft lawyers, if and when they launch their appeal against the ruling by the European Commission after five years of investigation. In March, the European Commission concluded that Microsoft was abusing the dominant position of the Windows in the two related software markets - the market for software that plays music and video and the market for programmes that run servers which link computers together. Microsoft officials expressed doubts that there would be much demand for the "stripped down" version of the operating system. There is also little incentive for computer manufacturers to switch to the unburdened and stripped version without a substantial fall in price. How Microsoft's competitors and rivals in the market place respond to the new strategy remains to be seen. Microsoft continues to invest heavily in new technologies and systems and is currently working on a new system of Windows, which will link media-player functions and related technologies even more deeply in a `core' operating system. Analysts point out that the rivals have yet to go a "long way to catch up with Microsoft." The European Court decision requires that information about communicating with both Microsoft servers and personal computers programmes be made available to others on a "non-discriminatory" basis. To start with, Sun Microsystems Inc signed a legal agreement with Microsoft earlier this year that includes provisions to share information so the two companies make products that work together. It remains to be seen how many similar deals Microsoft will make in Europe. According to software industry analysts, the latest decisions may have altered the course of the industry. Some think that this is a moot point but much will depend on how the European Commission, Microsoft and the industry at large respond to the new patterns of emerging logistics of power and influence. In the final analysis, all this may not be a boom for European consumers. The recently appointed European Commissioner for Competition, Ms Neely Kroes, is still to chalk out the strategy against Microsoft in the background of Wednesday's Court ruling, amid realisation that there is case for some sort of regulatory supervision.
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