FSFE to EC: Don’t waste an opportunity with a hasty deal
High Noon in Brussels. At the end of her term, competition Commissioner Neelie Kroes is wrapping up two open cases against Microsoft. The company offered to settle in July 2009.
FSFE is involved in both of cases. We are concerned that the Commission may end up reversing years of successful antitrust work if Neelie Kroes settles for far too little in order to close a deal, any deal. That would mean that Europeans remain stuck with the present Microsoft monopoly in most areas of the desktop. Even worse, that monopoly would have the Commission’s official seal of approval, effectively ruining many years of outstanding work by Ms Kroes and her team.
The first of the two cases is the so-called “browser case”. Web browser maker Opera filed a formal complaint with the European Commission in 2007 on Microsoft’s abuse of web standards, as well as the company’s practice of tying its Internet Explorer (IE) browser to its operating system. The Commission investigated, and formally opened proceedings against Microsoft in January 2009.
FSFE joined this case as an interested third party, in order to fight the way in which Microsoft uses proprietary extensions to web standards in order to unlawfully segment the Internet. So we can give input and advice to the Commission, and take part in the official hearings. This is similar to the role we had in other antitrust cases against Microsoft, most notably the Samba case, which ended in a resounding victory for Free Software. Unfortunately, the European Commission decided to drop the question of standards from its investigation, following up only on the force-feeding of IE to Windows users.
The second case is about interoperability. Microsoft refuses to let competitors make their software work with many of the company’s desktop applications, such as Outlook/Exchange, Office, SharePoint and .Net. Here, the European Committee for Interoperable Systems (ECIS) submitted a complaint in 2006, but the Commission hasn’t formally opened a case yet. If it ever does so, FSFE will represent the interests of Free Software in the proceedings.
Browser case: what’s wrong with Microsoft’s proposal for a settlement?
What would real competition in the browser market mean? Users could freely and easily choose among a wide variety of browsers, rather than having one program imposed on them. Installing and using any browser on a Windows system would be just as easy as using IE. No lengthy download and installation procedures, no fiddling with setup menus, and no need to tell every single application that it should use your preferred browser rather than the one that happens to be made by the same company as your operating system. Windows would play nicely with all of them.
But this is not what Microsoft’s proposed commitment [.doc] will lead to. Here’s why.
Downloading vs pre-installing browsers
Microsoft proposes that when the user turns on a fresh Windows 7 install for the first time, she would see web page – in Internet Explorer, no less – that would let her choose between different browsers. She could click on any one of those to download and install it on her system.
This so-called “ballot screen” approach sounds good for about as long as it took you to read the last paragraph. Microsoft has shown time and again that it will use every trick in the book to prevent competition. So, as we at FSFE have said before, the devil will be in the details.
Downloads are cumbersome if you have a slow connection, and may fail frequently. This makes choosing an alternative browser more difficult than sticking with Internet Explorer, so most people won’t bother.
That is why Microsoft should pre-install the alternative browsers (at least those where the browser maker wants it), so they are there as soon as the user wants them.
Which browsers on the ballot screen?
Which browsers will appear on the ballot screen? Microsoft proposes to choose the browsers that are presented on the ballot screen according to their market share. That would largely freeze the market in today’s state, locking out competitors. Given that IE has been steadily losing market share over the past years, that would make Microsoft very happy indeed.
Instead, browsers for the ballot screen should be selected according to a set of clear criteria, and the Commission should monitor the selection. These criteria should be
-
market share
-
cross-platform availability
- speed of growth in market share
The selection should be updated every few months.
Existing market share tells us which browsers are widely used already. But that in itself isn’t sufficient to allow competition and innovation in the browser market. By using the speed of growth in market share as a criterion, new and innovative browsers can get onto the ballot screen. By including browsers that are available on several platforms, users can more easily move between different operating systems without having to get used to a different browser each time.
Integration into Windows
Any browser that the user chooses needs to be integrated into the Windows operating system to the same degree that IE is integrated today. For instance, the browser’s icon needs to replace the IE icon everywhere, and all applications that rely on a browser should point to the browser that the user has selected, rather than IE.
Worldwide monopoly, worldwide remedy
The World Wide Web is just that – worldwide. So is Microsoft’s desktop monopoly. If any settlement between Microsoft and the Commission is going to have any effect on the market, it has to apply in all countries, not just in Europe as Microsoft is proposing.
Interoperability
The second case is about Microsoft’s constant refusal to let competitors make their programs work with the company’s dominant desktop applications.
Microsoft has always opposed giving competitors with enough information on its file formats and protocols to produce drop-in replacements for products such as Outlook or SharePoint. In the Samba case it finally had to do so, but had to be dragged kicking and screaming all the way there.
The “Interoperability Undertaking” [.doc] that Microsoft has proposed is absolutely insufficient. It will hardly give competitors enough information to actually compete, and is likely to leave Free Software in the cold. Those competitors that succeed anyway will live under a Sword of Damocles, because Microsoft may hit them with a patent suit at any time.
So far, Microsoft is only offering the interoperability information on what is falsely labeled as “reasonable and non-discriminatory” (RAND) terms. (For a full discussion of this issue, see FSFE’s analysis here.) From our perspective, such terms are both unreasonable and discriminatory, because they make it impossible to use the interoperability information in Free Software.
What we need for a software market with real competition is a binding commitment from Microsoft to provide and update interoperability information on terms that are compatible with Free Software. This has to be a legally binding document, and needs to include guarantees as well as clear remedies if Microsoft fails to comply.
This commitment could be based on the PFIF agreement (here’s the PDF) under which the Samba team receives information from Microsoft. Among other things, the agreement requires Microsoft to provide the information for a one-time fee. Since there are no running royalties on sales, this is compatible with Free Software under the GPL.
Patents
In any such agreement, patents will play a central role. Microsoft expressly refuses to say that it won’t enforce patents on interoperability information. This lets the company use the same strategy of sowing fear, uncertainty and doubt (FUD) with which it fights GNU/Linux: It simply claims to have patents, but doesn’t say what they are or what they cover. Precisely because of this vagueness, companies will hesitate to actually make use of the interoperability information, for fear of being sued into oblivion by Microsoft.
So while competitors would have enough information to build software that can compete with Microsoft on an equal footing, they would frequently be too scared of being sued for patent infringement to actually use that information. This means that Microsoft would keep the desktop monopoly which it holds today.
Conclusions
In short, neither Microsoft’s proposed settlement nor its promises on interoperability are acceptable in their present form. If the Commission were to strike a deal on this basis, the lack of competition in browsers and desktop applications will remain just as bad as it is now.
As FSFE’s legal counsel Carlo Piana notes, the Samba case is an excellent precedent for both of these antitrust investigations. It was a case against the same company using very similar anticompetitive practices. Its victory in the case gave the Commission’s antitrust authorities a considerable boost. Importantly, the Samba case was resolved in a way that lets Free Software compete with Microsoft’s offerings. This is a crucial point, because in many cases the strongest competition for Redmond’s programs comes from Free Software.
The only party in this affair who needs to close a deal is Microsoft. They want to avoid another crushing defeat like the one they suffered at the hands of the Commission and FSFE in the Samba case, where the issue was interoperability in workgroup servers.
The Commission does not need a deal. Its mission is to promote competition in the European software market. It has built up a highly effective team of experts to deal with Microsoft over the years.
By imposing an artificial deadline on herself, Neelie Kroes needlessly gives away a very strong hand. Sure, nobody knows who will succeed her as competition Commissioner. But giving herself only a few days or weeks to close the deal means that she will have to settle the case on Microsoft’s terms, perhaps with a few token concessions. It’s easy to predict that this means that the settlement will let Microsoft continue to exclude the competition every step of the way, the way it always has.
Commissioner Kroes, you and your team have done splendid work over these past years. We ask you not to tarnish your legacy with a hasty deal. Please, do not snatch defeat from the jaws of victory. Europe deserves better.