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Can ECs antitrust ruling legislate the software industry?

Posted: 29 Oct 2007     Print Version  Bookmark and Share

Keywords:open source OS  antitrust  software licensing 

European businesses that have thus far shied away from Linux might not be more inclined to go open source as a result of the restrictions imposed by the commission.

The European Union (EU) said that Microsoft is now in compliance with its antitrust rulingspaving the way for greater use of open source OS like Linux in the workgroup server market.

The question is whether such systems will make significant progress against Redmond's offerings solely because the economic playing field has been levelled.

The EU's European Commission announced Monday that Microsoft has agreed to major changes in the way it licenses software in Europe to come into compliance with a 2004 decision in which the commission found that Microsoft was using monopoly tactics to dominate the workgroup server market and other software niches.

Specifically, the commission said Microsoft was overcharging for, or otherwise making unavailable, the documentation and code needed for rivals to create server products that could interoperate with Windows-based servers and desktops. The commission imposed nearly Rs.4,044.83 crore ($1 billion) in fines on the software maker as a result.

Proclaiming victory, the European Commission on Monday said Microsoft has agreed to make interoperability information available to open-source developers for a one-time payment of about Rs.5.66 lakh ($14,000). Microsoft also dropped its previous demand that developers licensing such information also pay hefty sums to license related patents. For developers that choose to license the patents (it's now optional), Microsoft has reduced royalty fees from 5.95 per cent to 0.4 per cent.

"The measures that the commission has insisted upon will benefit computer users by bringing competition back to the server market," said European competition commissioner Neelie Kroes, in a statement.

Gaining ground
That may be, but Linux and other server-side open source products already have been gaining ground on Microsoft in Europe and other markets and there's been no lack of options for IT departments looking for alternatives. Linux server distributions are available from Red Hat, Novell, Ubuntu and a number of other players, despite the fact that Kroes says there has been little "competition and innovation" in the server market due to Microsoft's "anti-competitive behaviour."

The European Commission claims that Microsoft currently controls more than 70 per cent of the workgroup server market, but doesn't provide any comparative data from past years when Linux options were few and far between. The fact is Microsoft's dominance of the workgroup server market was more complete several years ago when Linux was less on the scene.

What's also questionable is whether business software users who have thus far shied away from Linux will be more inclined to go open source as a result of the restrictions imposed on Microsoft by the commission. Software usage tends to be governed by technical considerations and, to date, European attempts to dictate market share in the industry have fallen flat.

For instance, Microsoft officials earlier this year said the company has had almost no takers for Windows N?the version of its OS that ships in Europe without Windows Media Player. European trustbusters ordered Microsoft to create and sell Windows N after finding that the company was monopolising the market for media software by bundling WMP with Windows.

So while Monday's announcement marks a clear victory for the European Commission over Microsoft, the EU could, politically, have a much tougher time imposing similar dictates in the future if the market share for open source servers doesn't increase significantly now that the playing field has been mostly levelled.

If open source servers fail to surge, free marketers will no doubt seize upon the fact as proof that market share can't be legislated in a business as complex as the software industry.

- Paul McDougall
EE Times

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