Microsoft EU Fine Shows Irony of Tech Antitrust

Microsoft was just fined a whopping $732M by EU antitrust regulators for breaking a voluntary agreement to give 15M users a choice of internet browsers beyond IE. The challenge according to Microsoft is they had a technical glitch which first allowed the choice and subsequently took it away. Yes, this does sound a but fishy.

Microsoft did indeed use its OS monopoly to kill off browser competition from Netscape Navigator in the nineties. They did however tie IE into the OS better than Netscape did, making it in many respects a better product.

Since that time, Internet Explorer has fallen prey to Chrome and even Firefox and lost share as it has failed to keep pace with advances in the industry. These other browsers had to compete in the free market without the advantage of bundling and they were able to show they could take on a company which bundled its software with the OS onto the majority of global computing systems.

In fact, part of the reason Google is in the OS business to begin with has to be their reaction to seeing how Microsoft successfully wiped out Netscape and others by using its OS upgrades to bundle new features.

Getting back to antitrust – tech moves so quickly that a company which is dominant today can rapidly lose share in just a few years if products and services aren’t upgraded.

As we saw with the Blackberry market share loss to Apple and Android – you could still be innovating and miss a change in the market.

New channels to the consumer such as Google’s home page have allowed Chrome to become a tremendous success in the market meaning even a company which “illegally” bundles its products can lose share to a company which is more innovative.

Which brings us to a fine which is the better part of a billion dollars – Microsoft will likely appeal it and may have a strong case to make that the free market leveled the playing field far better than regulators could.

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