Does Microsoft matter any more?

Last Modified: 17 Sep 2007
By: Benjamin Cohen

As Europe bashes 'market abusing' Microsoft, our technology correspondent says it's Google and Apple they should be looking at.

Could today mark the end of one of the longest running anti-trust cases in legal history?

The Court of First Instance, Europe's second highest court finally ruled this morning on whether the software giant operated in an anti-competitive way.

And much to the delight of anti-Microsoft lobby, the Seattle-based software giant lost its bid to overturn a ?497m penalty for abusing its "dominant position" by effectively keeping rival software firms out of the market.

The end? Possibly. But do not discount further appeals.

There is a danger that the court and indeed the European Commision which has fought so hard for Microsoft to be labelled as an anti-competitive company, will be left looking out of touch.

The case is complicated and begun in the 1990s with complaints from Sun Microsystems. Sun complained that Microsoft wouldn't give enough technical information to allow their software to be interoperable with Windows servers.

By 2001, the European Commission widened the investigation to include the bundling of Windows Media Player with standard versions of the Windows operating system, an issue far more relevant to the ordinary consumer.

Specifically, Microsoft is appealing the fine made in the European courts in 2004 for abusing its position on both how interoperable their software was and the bundling of Windows Media Player.

The inside information I've heard is that the 13 judges were evenly split, half agreeing with Microsoft and half with the European Commission who have quite doggedly fought Microsoft through the legal process.

It may have come to a casting vote by Bo Versterdo, the President of the Court of First Instance who will retire after delivering judgement.

The judgement is based on an old case and in many ways an old world- where Microsoft really was the dominant player in information technology. It's hard for it to have too much relevance today.

In terms of interoperability - a rather dull and techno-speak word - Microsoft has made marked improvements in the way that its server systems interoperate with other platforms.

Everyone has - we've moved into a world where everyone's systems need to interoperate with everyone else's to maximise sales and efficiencies.

In terms of Windows Media Player, sure it's pretty dominant. Everyone with a Windows computer has used it at least a couple of times. But what about Apple's iTunes? Like it or not, it's now the dominant force in digital music.

The appeal doesn't really go into Microsoft's dominance of the Office software market, but that has also markedly changed over the past few years. I'm not writing this article on Microsoft Word, I'm using OpenOffice Writer, an open source, free to use equivalent.

Then there's Google.

Not content with its near total dominance of the search market (something approaching a monopoly in the traditional legal sense of the word), the company has stretched out into Microsoft's domain in the office software market.

Just this week, Google signed a deal with Gapgemini to distribute the GoogleApps service to small and large businesses.

GoogleApps offers Microsoft Office style programs at a reduced license cost with the additional bonus of using the internet to allow collaborative work on the same document.

As the techno-world waits for the judgement, there is a danger that the court and indeed the European Commision which has fought so hard for Microsoft to be labelled as an anti-competitive company, will be left looking out of touch.

When the battle with Microsoft is over one way or another (both sides could initiate a further appeal), the Commission will have to start looking more carefully at the new players in the market.

Earlier this year, I reported that Google is under intense scrutiny from the European Commission in regards to privacy but there are many who argue that their market dominance needs to be examined too.

The Commission is examining Apple's pricing of digital music too.

But there's a danger that these cases too could drag on for a decade, by then the digital landscape could have changed again and they'll be out of touch.