Since 1998, Microsoft has been in a battle with EU regulators over allegations that they have engaged in monopolistic business practices. These allegations are similar to the anti-trust suit brought against the Redmond giant in the US Microsoft has now agreed to give up its battle against the antitrust legislation in an effort to stop the fines accruing against them at €3 million per day.
At the heart of the 1998 complaint: the bundling of Media Player with Windows, and the high licensing cost of information required for applications to work more efficiently with the Windows Operating System.
Under the deal brokered with the EU, Microsoft has agreed to license it’s intellectual property, with the exception of patents, for a one-time €10,000 fee. This is in place of the nearly 3% in royalty payments Microsoft had previously demanded. Patented material will be licensed for just under half a percent of the royalties. This fee was previously priced at 5.95%.
As much as I want to applaud an action like this, the sentiments at the core of the action taken by the EU smack of government interference. From what I can tell, aside from a very pricey operating system, Microsoft has done nothing to harm the consumer. They have a company that has invested money to either buy or develop software technologies, and are now being forced to license that technology to competitors for a specific price.
In some ways, this is similar to regulations put in place by the CRTC in Canada which have fixed the price of telephone service that can be offered to customers by the large carriers. The prices have been fixed in such a way that the carriers are not permitted to lower the price for fears that they will resort to pricing tactics that will eliminate any competitors. This was done without any evidence that any of the major carriers like Bell or Telus were resorting to such tactics.
Will this type of legislation help software developers create new and improved technologies and programs? Yes. For Windows. Will it help them to develop programs for other systems? Not likely. Will it help Microsoft sell more copies of Windows to people who want to use the new software? Probably. So tell me, EU: How does selling more copies of the most expensive server operating system in the world help consumers?
Next month, the review of the Google acquisition of DoubleClick is slated to complete. We’ll see what they have in store for another technology giant.
Sources
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