BuckeyeBlog

Earlier today a European Union court dismissed an appeal by Microsoft to throw out an earlier judgment against it. By doing so, this court let stand a record fine against Microsoft and forced it to share information on its operating system with its competitors.

This decision, ostensibly made to help consumers, will actually hurt consumers by slowing the growth of technology and raising the price for it. Essentially, Microsoft is being punished for not charging for its technology. It included its media player in its operating system. It did not force anyone to use it. Microsoft’s rivals, instead of trying to compete and develop a better system, instead turned to the courts.

Former Congressman Dick Armey has a good opinion piece on this issue:

…this throws up a large flag of caution for all firms that innovate. First, to what extent will innovation be viewed as a danger, especially for large firms that can be threatened with charges of unfair market dominance should they serve too many customers?

Second, will firms that innovate be allowed to enjoy the benefits of their research and development investments, or will they have to share their innovations when rivals complain to European antitrust authorities? Policies that limit bundling, or require code to be shared, strike at the heart of the incentive to innovate.

It must be remembered that, by and large, consumers are not crying foul. Instead, rivals, who have been unsuccessful competing in the market are looking to the European Commission for a helping hand. In one instance, when Microsoft was accused of unfairly including its media player with its operating system, the solution mandated by European regulators was to develop a version of the operating system that did not include a media player.

This entry was posted on Monday, September 17th, 2007 at 8:22 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.