Why the Commission is doing the right thing on antitrust

Previously on “European Commission Antitrust”

Free Software Foundation Europe has been supporting the European Commission’s DG Competition in its antitrust work since 2001, when it first offered its expertise to the former Competition Commissioner Mario Monti. In 2003 it brought the Samba team to the table, and our cooperation was able to provide the Commission with substantial evidence for its final decision in 2004. We stood by the side of the Commission in the European Court of First Instance when most of the industry had meanwhile accepted out-of-court settlements with Microsoft, and saw the case through to the end.

Of course the European Committee for Interoperable Systems (ECIS), which joined the case in 2005, was a seminal contributor to victory in the court case(s). Indeed it seems unlikely that the European Commission would have had such a complete success in Court without their support. But the steadfast support by FSFE and Samba played an important role in keeping the ball rolling with the Commission, and the technical experts of the Samba team were invaluable witnesses in Court.

This was the first time that the Free Software community got so involved in an antitrust case, and many people raised the question why FSFE should be actively pursuing this issue instead of big industry working the problem out amongst themselves.

Part of that answer is already contained in the above paragraphs. FSFE is not willing, indeed incapable, to compromise on the long-term interests of the Free Software community for short-term financial benefits. The settlements that parts of industry entered as part of this court case were financially beneficial for them, but weakened the case and had strategic impact that continues until today and radiates into apparently unrelated issues, e.g. the MS-OOXML standardisation process.

The other part of this answer is the immediate and tangible benefit of better software with more interoperability.

Ciaran O’Riordan described this in one of his blog posts. Summarised in my own words: The antitrust victory gave Samba direct access to necessary information to achieve interoperability, and re-established the constructive dialogue with Microsoft’s engineers, which had previously been cut off by Microsoft’s management for reasons of strategic monopoly abuse. Now, whenever the Samba team hits a part in the specification that is unclear, or discovers behaviour of Microsoft servers that is unexpected, they can ask Microsoft, and will receive a timely and helpful answer.

This, and not the record fines, is the true benefit and remedy of the case. As explained in an earlier article: Competition is slowly being restored, and step by step innovation is being re-enabled.

The Opera Complaint

As a good friend of mine likes to say: “Microsoft is a one-trick pony, but it does that one trick really well.”

The same behaviour that we observed in the workgroup server market also exists in other markets, so the above establishes the context for the ECIS complaint with the request to apply similar remedies to other areas and the  Opera complaint specifically on monopoly abuse in the browser / web standard domain. FSFE supported that complaint because we know that Free Software browsers such as Mozilla or KDE’s Konqueror are suffering from the same problems. We even came across scenarios where a migration to Free Software had to be rolled back to Microsoft’s Internet Explorer because of manipulations on the protocol level that made using Free Software impossible.

It is good news for Free Software and the free internet that the European Commission has decided to take up the Opera complaint.

Microsoft’s perspective on the whole issue was a bit different for obvious reasons. Since the media was very critical of them in the previous case, they immediately started to spin the story to journalists, which was reflected in various articles that are critical of the Commission for being anti-competitive and anti-innovative, and portrayed Microsoft as the victim of discrimination. Some comments in various discussion forums also reflected that spin, asking why Apple or GNU/Linux distributors were not treated the same way if they only ship one browser.

The answer is so simple and should be obvious: Because in order to abuse a monopoly, one first needs to obtain a monopoly.

Monopolies themselves are not illegal. But they translate into excessive power over a market and its neighbouring markets. So when a monopoly uses market-distorting practices to leverage neighbouring markets, antitrust authorities have the responsibility to curb that practice, impose effective remedies, and restore competition and innovation.

As Mitchell Baker of the Mozilla Foundation pointed out in her recent blog posting, there is little doubt among the experts involved in these issues that the Commission has done the right thing also in this case:

Last month the European Commission stated its preliminary conclusion that “Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice.”

In my mind, there is absolutely no doubt that the statement above is correct. Not the single smallest iota of doubt. I’ve been involved in building and shipping web browsers continuously since before Microsoft started developing IE, and the damage Microsoft has done to competition, innovation, and the pace of the web development itself is both glaring and ongoing. [...]

The big question will now be: Which remedies will be effective to restore competition and innovation? That question is a bit more complex than it was in the previous case because the abuse is a combination of protocol manipulation and tying, so an effective remedy would also have to address both aspects.

As we have done in the previous antitrust case, FSFE is looking to work closely with the affected Free Software projects and communities to identify the best possible remedies, to support the European Commission in its technical investigation, and (if necessary) to help the European Commission uphold its decision in Court.

We therefore invite all affected projects to get in touch with us, will actively seek to involve core participants and projects, and would like to take Mitchell Baker up on her invitation to discuss the best possible remedies for Mozilla.

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