Microsoft has changed (some of) its monopolistic ways
On September 17, the European Court of First Instance will decide whether or not to overturn the European Commission's 2004 antitrust ruling against Microsoft. A number of company watchers are painting the ruling as a watershed event …
Context & Ripple Effects
Two days before judgment day: on September 17 the European Court of First Instance rules on whether to overturn the European Commission's 2004 antitrust ruling against Microsoft, a decision company watchers are framing as a watershed for how the EU handles dominant software vendors. Stakes were raised back in March, when the Commission threatened new fines against the company.
The conduct record heading into the ruling is mixed. Microsoft has visibly loosened up — offering Office Ultimate 2007 to students for $60, a $620 discount off the $680 list price — which fits the 'changed some of its monopolistic ways' narrative. But critics note the old habits persist: the company patched Windows XP and Vista files without users' knowledge even when auto-update was switched off, drawing fire for forcing updates onto personal PCs without owner consent.
First-order effects
- The Court of First Instance's September 17 decision determines whether the European Commission's 2004 antitrust ruling stands, with the Commission's March threat of fresh fines hanging on the outcome.
- Microsoft's own behavior is already adjusting under the spotlight: deep student pricing on Office Ultimate 2007 shows willingness to trade margin for goodwill while the case is live.
Second-order effects
- Unconfirmed chatter of shifting fortunes between Microsoft Outlook and IBM Lotus Notes suggests competitors view the ruling as a potential opening in the groupware market Microsoft has long dominated.
- An upheld ruling would hand the Commission leverage over Microsoft's bundling and interoperability practices well beyond this specific case.
Third-order effects
- If watchers are right that this is a watershed, the verdict becomes the template for how European regulators constrain dominant platform vendors — a precedent other regulators and litigants can borrow against any incumbent that locks in customers through default positioning.
The trend: European antitrust enforcement is moving from punishing past monopolistic conduct to shaping the forward business practices of dominant software platforms, with Microsoft as the test case.