The Microsoft Company versus EU Commission
Purpose and Objective
This case analysis will give the readers a total picture of how Microsoft, a well known company throughout the world was being accused by European Commission for the abuse of its dominant market position. This has been started in 1993 when Novell stated announced that Microsoft was trying to block its competitors out of the business and market through some anti competitive practices. This complaint has been centred on license practices on the time which required some royalties from every computer sold by any of Microsoft suppliers operating the system. Microsoft Company has reached a settlement in the year 1994 to end some of its license practices.
Sun Microsystems has joined fray in the year 1998 when they complained about lack of disclosure in some of the interfaces to the Windows NT. This case widened more when EU began to look into how the technologies of streaming media were integrated with the Windows.
This issue will be given a shed of light when all the facts and necessary arguments will be presented in this paper. Let us allow the readers to share their opinion towards the merit of the case.
The case started in the year 1993 when Microsoft was being accused of blocking its competitors through anti - competitive practices. By citing ongoing abuse by Microsoft, the European Union has reached to a decision in the case in the year 2003 and then ordered the company to propose and offer both a version of the Windows without Windows Media Player and some of the information necessary for competing networking software in order to interact fully with Windows servers and desktops. This case continue to progress until March 2004, the EU ordered Microsoft company to pay €497 million which equals to $794 million or £381 million, and it's the largest fine ever handed out by EU at that time, in addition to the penalties previously.
Microsoft released a paper on the next month which included " The commission seeks for making a new law that has an adverse impact on intellectual property rights and has the ability of dominant firms in order to innovate".
During that year 2004, Neelie Kroes had appointed that the European commissioner for the competition; one of her tasks was to oversee the fining that's brought onto Microsoft by European commission, which was known as European Union Microsoft competition case. This case has resulted in the requirement to release some documents to the aid commercial interoperability and included a fine for Microsoft which was €497 million. Kroes announced that she believes that open source and open standards are preferred to anything proprietary. The Commission should do its part. It shouldn't rely on one vendor, it must not accept the closed standards, and shouldn't refuse to become locked in a particular kind of technology.
It was stated by Neelie Kroes that Microsoft Company has a compliant version of the flagship system of operating left without Windows Media Player which available under the negotiated name "Windows XP N. In response to the server information requirement, Microsoft have released the source code, but not any specifications, to Windows Server 2003 service pack 1 to members of its Work Group Server Protocol Program (WSPP) on the day of the original deadline. Microsoft has also appealed the case, and the EU had one week long for hearing overit.
Microsoft has stated that their obligations in decision are not so clear, or that their obligations did changed. The Commission couldn't accept about the characterization, Microsoft's obligations are very clearly outlined in the year 2004 decision and they remained constant since that time.
Indeed, in the October 2005 monitoring trustee appointed, from a shortlist put forward by Microsoft, believes that the decision clearly outlines what Microsoft is required to do. Although it is difficult to imagine a company like Microsoft couldn't understand the principles on how to document protocols to achieve interoperability.
The bottom-line of all these accusations with the Microsoft is about Antitrust policy. It refers to the government policy in regulating or breaking up monopolies in order to promote a free competition and to attain benefits that a competition can provide to the society and to economy as a whole.
Monopoly is the situation where there is a single provider of product for which there are no close substitutes. The free competition is the situation where multiple companies offer a similar product and then compete solely on basis of quality and price, including the quality services that are associated with products (e.g., packaging, delivery and warranties).
In the situation of Microsoft, it will be a battle or a fight being stressed under the European Union. Microsoft Company has lost their appeal against the European Commission charges of the anti-competitive behaviour. The Court found that Microsoft Company had failed to supply competitors with some sufficient information in order to allow servers to interoperate more effectively. They found Microsoft failed to proof that these APIs were intellectual property or that giving them out would have a negative impact on their ability to innovate.
The Court of First Instance again upheld the Commission's stance on the bundling of Windows Media Player with its operating system. It managed that Microsoft had not shown the justification for bundling their Media Player to an original equipment manufacturers.
Following by the original decision Microsoft Company had to agree for the imposition of trustee in order to oversee the company and then check it if they comply with court demands.
- Fried, Ina (2003-08-06). "EU closes in on Microsoft penalty". CNET News.com.
- Commission Decision of 24.03.2004 relating to a proceeding under Article 82 of the EC Treaty (Case COMP/C-3/37.792 Microsoft). Commission of the European Communities. Brussels, 21 April 2004.
- "Microsoft hit by record EU fine". CNN. 2004-03-24.
- Parsons, Michael; Best, Jo (2004-03-24). "EU slaps record fine on Microsoft". CNET News.com.
- Fried, Ina (2004-04-21). "Microsoft commentary slams EU ruling". CNET News.com. http://www.news.com/2100-1016_3-5197390.html. Retrieved 2006-07-01.
- Hines, Matt (2004-07-02). "Microsoft pays EU in full". CNET News.com. http://www.news.com/2100-1014_3-5255715.html. Retrieved 2006-07-01.
- Marson, Ingrid (2005-11-18). "Still 'no demand' for media-player-free Windows". CNET News.com. http://www.news.com/2100-1016_3-5960750.html. Retrieved 2006-07-01.