Debating Myself

Microsoft was recently slapped with a record fine for failing to comply with a 2004 ruling in an anti-trust case. PaidContent.org has a good summary of the European Commission’s decision, which found that Microsoft still was charging too much for licensing of its server data to enable competitors’ products to be compatible. (Another sticking point was the bundling of the IE with the Windows OS.)

The Economist’s Free Exchange blog gives a good description of the rocky history between Microsoft and the EU:

In 2004, the European Commission used its awesome trade regulation powers to fine the software firm €497m, followed by a further €280m in 2006. Now, the commission has fined Microsoft €899m ($1.4b, £681m) for failure to comply with an earlier 2004 ruling, centred on its bundling of Explorer internet software with its Windows operating system.

Clearly Microsoft is a successful and financially stable company (stable enough to attempt to acquire Yahoo for $44.6 billion) but as the Economist points out, this fine is larger than Sweden’s net contribution to the EU budget in 2006. Microsoft has continually faced much stiffer resistance to its business practices in Europe than in the United States—and certainly this latest setback does not bode well for Microsoft’s acquisition of Yahoo! either.

Certainly bloggers over at the Guardian feel that Microsoft got what was coming to it—there is a great discussion in the comments section of this blog debating the evils of Microsoft. I’m not sure I agree. Microsoft’s market dominance perhaps stifles the development of operating systems, but no one seems to complain that if I were to purchase a MacBook (until recently) I only had one choice of operating system on that platform as well. Microsoft has, in fact, been facing stiff competition from cost-free open-source competitors in the form of various incarnations of Linux. It seems to me that the punishment does not fit the crime—and certainly bundling XP with IE seems a rather minor affair in an era when browsers are obtainable in a matter of seconds.

After puzzling this for some time, I began to think, what if Microsoft struck back at the EU? A blogger at 22Hundred.net had this to say:

To Microsoft I say this…..pull out of Europe! Not completely obviously but give the EU exactly what they want. Remove IE, Windows Media and all other additional software from XP now, after all it’s only going to be supported for a few more months anyway. Then let the people who have just bought their shiny new OS try to use the damn thing without the bundled applications and ensure that the OEM’s do not bundle software to make up for it. It’s time to make the EU suffer.

My girlfriend and I were having a similar discussion, but she wasn’t as concessionary. Imagine if Microsoft pulled out completely. European consumers would be furious at the European Commission, because love it or hate it the Microsoft monopoly means that all of their computers can talk to each other. Most consumers are familiar with Windows and switching to Linux or Mac would be difficult, costly, and inefficient. Server farms running on Windows Exchange and other software would not be able to upgrade to Vista. Even the lack of Office support and service alone could bring the massive bureaucracies of the EU and its member-states to a halt.

Of course public opinion would prevent Microsoft from doing anything like that. But, if any corporation is tough enough to take on an overzealous regulatory regime like that of the EU, Microsoft is. I’m not saying it would (or should)… but it is an interesting thought experiment.

Perhaps a safer solution comes from the Economist:

Perhaps Bill Gates should cut his losses and buy a small EU nation state (Malta is nice at this time of year), keep paying the same money, but this time ask for voting rights at EU summits.

He could rename it something catchy too—like Zune Island.

I am having a hard time understanding the logic behind this one. Kosovo secedes from Serbia. US and other countries support secession. Serbs in Belgrade riot and burn the US embassy in Belgrade killing one unidentified person. Huh?

I understand the outrage over losing a part of your country–and it is unlikely military force is a solution the Serbs can employ in regaining it–but why attack the US embassy? How will that accomplish the goal of getting Kosovo back–or, if Serbs are ready to be more progressive, how will it establish a new reputation for Serbia as respectful of international law? But, I guess ethnic tensions are still high in the region and that is what this misplaced aggression is really exhibiting.

Maybe Serbs were politically aware enough not to burn the embassies of EU countries because they still think Serbia has a good chance at accession. I don’t quite think mass chaos over a long planned secession is really going to help the Serbian government make its case strongly–nor will assaulting the sovereign territory of a strong European ally.

The next few weeks will be very telling for the entire Balkan peninsula. Are the Balkan countries willing to embrace diplomacy and peace, or will the situation devolve back to violence, bloodshed and war crimes?