European Commissioner Discusses Busting up Microsoft

Kachina Shaw

Discussions this week by the European Commission on how it will define -- and deal with -- companies it believes are using anti-competitive practices in the European Union have led one member of the European Competition Commission to float the idea of a Microsoft break-up, closely followed by statements from an unnamed former U.S. justice official intimate with the details of a past break-up attempt in the U.S. The official says, at this time, that sort of punishment doesn't fit the "crime," and the company shouldn't be punished, anyway.


Reuters reported earlier this week that in preparing to give said guidelines, the Commission's competition unit indicated that a big case is complicating and most likely heavily influencing the conclusions of the unit. It didn't mention Microsoft, but we can draw our own conclusions.


The conclusion of the U.S. justice official seems to be that the EU would pursue a bust-up as a punitive measure, whereas the Justice Department began its actions solely to address a lack of competition -- but then abandoned them. So the problem is that we can never know how successful the Justice Department would have been, since it didn't finish the job of slicing up the company, nor did it levy fines while it investigated how to proceed, as the European Commission has, to the tune of over a billion dollars, to date. Hey, at least they're getting paid.


Since the EC began fining Microsoft in 2004, the company has filed a series of appeals and complained bitterly and publicly that it is being treated unfairly. Some outsiders tend to think it may have a point, and a court is expected to rule on Microsoft's appeal of the EC's authority over its business practices later this year.


The Reuters piece makes it sound like the DOJ sought a structural change in Microsoft that would somehow not hurt the company's market positions, but the EC would institute a more damaging plan. Perhaps the distinction is lost in translation, but isn't the purpose of government-designed anti-trust regulation to change the monopolistic market positions of those companies found in violation?

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May 10, 2007 12:18 PM Richard Kristin Richard Kristin  says:
I fail to see how breaking up Microsoft into smaller microsofts is going to remove their monopolistic behavior. As I see it instead of one body to address the EU would then have to address several bodies, further fines will not work as Microsoft is sitting on a war chest of over 48 billion (yes that is Billion with a 'B'), in addition it continues to make more than the EU are fining them so why should Microsoft comply? Everything in this case goes in microsofts favor the longer things go on. Here are some of the points:1. Microsoft makes more money and gets rid of major competition the longer this goes on; as its market share continues to grow unchecked it is now about 75%.2. Microsoft is a US company and the EU doesn't have any legal authority over it outside of the EU.3. Microsoft can wait until the EU presidency is up for election, or work towards placing someone else in the position, that is more Microsoft friendly.4. Microsoft will in all likelyhood have the fines imposed by the EU reduced greatly or eliminated entirely by a court of appeals.5. What the EU is forgetting is that companies do not care about competition unless they are in competition. AKA Money Talks and Microsoft talks very LOUD!6. If they impose a Break-up and it is madated by LAW in the EU, what are they going to do if Microsoft says NO, we do not recognize your authority.7. What if Microsoft says we are not going to pay your fines? What can the EU do?8. The EU is attempting to accomplish something that the US Government could not do to a US Company on US Soil in a US Court! The EU needs to get a reality check.Things that Microsoft can do to really have fun with the EU:1. No we are not going to pay you a dime2. We would like you to order every EU company to uninstall all MICROSOFT products and return them and the orignial disks back to the purchasing agent as they are no longer valid (Read the EULA).3. No refunds on any of the returned products4. All existing Microsoft software will cease to function in 90 days as we have decided that we can not function profitably in the EU5. Monolpy is a game madam president, Bill wants to RULE the WORLD.6. You have a choice LINUX (Pick a Distro), Apple, IBM, who else has a OS hum.7. Microsoft could buy all of the petitionin companies; fire the management of the companies, and install puppet regimes.8. Microsoft could start to BUY the European Union 1 country at a time!9. Can we say: "Now introducing the President of the United States Mr. Bill Gates"!10. #9, only instead of President of the USA try the EU. Reply
May 14, 2007 2:38 AM msu msu  says:
Microsoft bases most of its finances in Ireland.In the EU. Reply

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