Mr. Topp and the Big Bad Blog

You buy a new computer, bring it home, and turn it on. It — like most computers — comes equipped with the latest Microsoft Operating System. What is the first thing you do?

For many people, the answer would be go online. Perhaps it is because you are addicted to this Internet thing. Perhaps you want to download another browser, such as Firefox, Opera or Chrome. Perhaps you want to download some other program for your computer. But you have just encountered a problem.

Why? Because you are in Europe, and Microsoft no longer bundles Internet Explorer with Windows. This leaves quite a dilemma for Microsoft.

On one hand, most (if not all) computer users use their computers to access the Internet. For many, it is the primary or secondary use of their computer. Microsoft has a free product that allows this, but the European Commission has ruled that bundling them together is an anti-trust violation. Hence, no more bundling.

On the other hand, a new computer (or a computer with a recently upgraded OS) can be considered to be largely useless if it does not allow one to browse the Internet. How can a Microsoft OS not be considered to be an inferior product if it does not even allow this basic functionality?

The BBC article has the following sub-headline: European buyers of Windows 7 will have to download and install a web browser for themselves.

My question is: how? That might be simple with Internet Explorer pre-installed. You simply run it. Perhaps it even goes directly to a Bing search for Web Browser the first time it’s opened, with a pop-up message explaining that they should choose another browser if they do not want to use Internet Explorer. Of course, they cannot do this without risking another billion-dollar fine. So what options do they have?

Microsoft’s Options
The answer is that Microsoft has very few options that do not raise serious concerns — all of them are flawed.

Option 1: Make downloading Internet Explorer easy.
Microsoft could give access to a “Microsoft Store” through the Operating System, which would allow people to download Internet Explorer, buy Microsoft Office, and so on. In this way, they would not have bundled Internet Explorer with the Operating System, but will make it easy on the user to get it.

However, it is hard to see this as any less of an abuse of power than bundling was. The issue with bundling was that by having IE pre-installed as the default browser, it meant that passive users (the majority) would never even consider their options. There is no reason to, as they are already online, unless the browser gives them a negative experience.

This is simply a continuation of Internet Explorer as the default browser — the change is immaterial in this sense.

Option 2: No Internet
A second option would be to simply have computers with Windows 7 not come Internet-ready, and require users to take action in order to get the Internet set-up on their computers.

This must be a tempting option for Microsoft — they could say to European customers “this is what you asked for — have fun!” Customers who were unprepared would need to order a CD to install a browser, and are more likely to call Microsoft than Google, Apple or Mozilla — if Mozilla even has a CD order line. They would comply with the ruling this way, while showing the European Commission to be incredibly short-sighted.

Of course, this also takes everything out on their customers. At a time when Microsoft is battling with Apple, Google, and the open source movement, they can hardly afford to make their customers suffer in this way. It would doubtlessly cut into their market share in every market that they are in. As such, it is not a real option.

Option 3: Give the user options
Another option would be to give the user options to download a number of browsers when setting up the computer initially. They could, for example, provide links to download Internet Explorer, Chrome, Safari, Opera and others. This would satisfy both the anti-trust concerns and the no-Internet concerns.

However, how is this list decided?

They could only include the “top browsers” on the market, but this would stifle the market further, ensuring that you need to be an Apple or Google to enter the browser market. If users do not currently explore their browser options because of the Internet Explorer pre-installation, how likely are they to make a change after they have actually made a choice. It essentially requires potential competitors to have market share before they can enter the market, and is even less competitive than before.

They could only include non-competitive options. Why give Google a leg up by including Chrome? Why not give Apple a little kick for those “I’m an PC” ads, and not include Safari? Why include Firefox, your biggest competitor? By promoting a revolving door of non-competitive browsers, Microsoft could give other options while closing the door to their biggest competitors. Not a bad idea, but hardly in the spirit of the ruling.

Alternatively, they could allow any browser to apply to be on the list. But what standards need to be set, in this case? Surely Microsoft needs to ensure that the available browsers are free of malware and provide a reasonable amount of security. But who sets these standards? Who judges the quality of the browsers? If it’s Microsoft, they get to peek into the code of every competitor and set the industry standards. Surely that is more damaging to a free market than having Internet Explorer bundled.

Microsoft’s Solution
Microsoft’s solution is to push Internet Explorer on computer makers and sellers. Your new computers will continue to come with Internet Explorer pre-installed as a result. For people upgrading, Microsoft has promised to make IE easy to download and install. In essence, they are using Option 1.

The European Commission is already expressing their concerns that this will not alter that Microsoft is abusing their market position to push Internet Explorer on consumers. But Microsoft does not have any good options, in truth. They can either give their customers a means of getting online, or leave them in the cold. The latter option is not a real option for a business.

Were I making the decision for Microsoft, I would opt for Option 3, and create standards for other browsers to be included in the list of available options. It would mean that the company would have to include Firefox as an option to new users, but it would effectively sink much of the competition who would not want to share their secrets, and place Microsoft as the standard-setter for web security. While Microsoft certainly does not need any more market dominance, it could twist the European Commission’s decision into greater control of the market.

What’s wrong with the European Commission?
One has to wonder what the European Commission expects Microsoft to do. They have expressly said that they do not expect Microsoft to ship Operating Systems that will not allow consumers to access the Internet, but they also do not want them to be shipped with Microsoft’s browser.

But these are Microsoft’s two options. They cannot simply include any and all options, and they should not (and doubtlessly do not want to) only include their main competitors, blocking new competition from the market.

In working life, there are often people and organisations that enjoy finding problems but not solutions. They erect barriers, find excuses and reasons why something cannot be done or is less than ideal. It strikes me that the European Commission is such an organisation in this instance.

One presumes that the The European Commission are — or ought to be — acting to protect European consumers. Microsoft’s browser-bundling makes it difficult to compete against them in the browser market, giving the end user fewer choices. This presents difficulty to smaller businesses in the browser market, and fewer innovative, quality products for computer users.

No arguments there.

However, is fining Microsoft repeatedly until they stop bundling their browser a logical solution? Without another means for Microsoft Windows users to initially access the Internet, the answer is no. If the consumer is really who the European Commission is trying to protect, they should be choosing the lesser of two evils. While attacking Microsoft at everybody else’s expense might sound like fun — who really likes Microsoft? — it should not be the driving concern of the European Commission in these matters.

What about Apple?
Furthermore, why has Apple not been fined in a similar manner?

Apple bundles their products — computers, iPhones and iPods — with the Safari web browser, in much the same way that Microsoft bundles Internet Explorer with Windows. Furthermore, their iPhones require that users tie themselves to a particular mobile phone service provider, and only provide one source for iPhone programs (the Apple App Store).

Surely if Microsoft is fined 900 million Euros for bundling a browser with an Operating System, the same should happen to Apple? Should everybody not be playing by the same rules? If such bundling is illegal, it should simply be illegal — no different rules for different people or companies.

A vendetta?
Overall, the European Commission seems to be gunning for Microsoft. It’s the only thing that makes sense.

The antitrust rulings against Microsoft damage consumers rather than helping them, and Microsoft’s competitors who engage in similar practices are not subject to the same penalties.

The European Commission should examine their decisions in light of providing a level playing field for all companies, big and small, and protecting the best interests for European citizens who use their products. In this instance, they have failed on both counts. The rules that apply to Microsoft must apply to everybody, and the decisions made do not serve the customer’s best interests.

Microsoft has a huge market share, which they abuse at times. This needs to be addressed — but in a fair way that protects European citizens, and not as part of an at-any-cost vendetta by the European Commission.

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