The EU and Microsoft - First Take

Michael Gartenberg | September 17, 2007, 09:07 PM

lI need to preface this by pointing out that I'm not a lawyer (much to my parent's chagrin) and I'm certainly not an expert in ant-trust law. Having said that, there's something unsettling to me about the  EUs ruling on Microsoft. Fisrt the impact. While this is a setback to Microsoft, the financial impact for Microsoft isn't major, the bigger issue is Microsoft's ability to integrate new technologies and features into products like Windows and Office as a core strategy to keep their products relevant. It will also be interesting to see how this impacts other companies as well. At what point will we see someone bringing suit to prevent Apple from including iTunes and iChat as a part of Mac OS.

What's interesting to me and perhaps what's causing me to feel uneasy about the ruling is how irrelevant the issues in the case seem to be at the present time, how the competitive landscape has changed and how players have competed successfully against Microsoft without government intervention. When this action first began, Google was an interesting startup, Linux a fledgling OS with appeal only to hackers and enthusiasts and Apple had been relegated to the role of a bit player in the PC stage. Today, Google competes directly with Microsoft in a battle ground that didn't exist in years past, Linux has become a mainstream alternative to Windows in the server market and Apple is dominant player in digital music.

What's even more interesting is Linux is far more a competitive threat to Microsoft in the server market than Sun ever was. Apple far a bigger threat in in digital music through iTunes and Quicktime than Real was. And both of these technologies and the vendors behind them managed to compete rather effectively against Redmond without the need for any government to regulate Microsoft's behavior.

Technology moves at a different pace than almost any other industry. Today's market leader has the potential to be displaced by an upstart in the historical blink of an eye. The nature of competition is also in flux and inhibiting any vendor's ability to compete effectively in free markets benefit in the end benefits no one, least of all, the consumer.