[T]he U.S. focused on Microsoft’s effort to eliminate rival web browsers as a to Microsoft’s monopoly in the PC operating systems market. The EU case, however, appears to be directly focused on Microsoft’s efforts to stifle competiton in the media player and low-end server markets.
Microsoft’s strategy seems to be to lose on liability, if necessary, but win on the remedy. With respect to the U.S. case, Microsoft drew out the case, successfully wearing its opponents and observers down. . . [A]s previously noted, Microsoft has succeeded to large extent in the U.S. by delaying the imposition of remedies until the markets in question had irreversibly tipped in Microsoft’s favor. The EU case presents the same risk.
Consequently, the conduct remedies may be most significant part of the upcoming decision. With respect to the Workgroup Server market, the main remedial issues revolve around interoperability. Competitors want to see something similar to what was imposed on IBM in a much earlier case. “Full interoperability” is the key term. It has been defined in the Software Directive as access to all functions and features so that they function as they were intended to operate. Disclosure of the Windows APIs and protocols is another probable remedy, but this could Invite foot-dragging by Microsoft.
A credible remedy with respect to Windows Media Player needs to require at least two things. First, Microsoft must unbundled the Windows Media Player from Windows. Preferably, Microsoft would not be allowed to distribute Windows Media Player with Windows. Most reports, however, suggest that the EU will require Microsoft to offer two versions of Windows, one with and one without Windows Media Player. So long as Microsoft is not allowed to charge the same (or higher) price for the stripped down version of Windows, this will still be a significant step forward. Second, Microsoft must open up the formats at the server level so that Content Providers can choose among competing providers of streaming technologies.
It is probably true in Europe, as it was in the U.S., that the price of Windows did not fall as rapidly as it would have fallen in a more competitive market. But the strongest arguments for enforcement action lie in the realm of consumer choice being reduced by anticompetitive behavior and investments in innovation being deterred by fear of Microsoft’s ability to usurp any innovation that shows signs of success.
I also recommend Hawker’s March 10th article Microsoft: There’s a Media Player Story in the U.S., Too.