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08.07.12

Backroom Deals Gave Microsoft Europe

Posted in Antitrust, Deals, Deception, Europe, Microsoft, Open XML, OpenDocument at 4:22 pm by Dr. Roy Schestowitz

Dick Tracy

Summary: How dirty dealings in Europe have been benefiting the convicted monopolist from Redmond, United States

THE always-excellent journalism from Mark Ballard helps expose injustices in Europe. His latest output says that “Europe’s ill-fated 1993 migration to Microsoft Office was rubber-stamped by a committee that failed to see how it would get locked into buying Microsoft without a competition for the next 20 years, show documents released to Computer Weekly.

“The European Commission used dubious reasoning to justify its decision in 1992 to do a backroom deal with Microsoft. Officials at the time said it was based on a survey of the wordprocessing market. But they took that as justification for buying Microsoft’s entire Office suite – with spreadsheet, presentation, email and database software – without opening the business up to any other competitor. And it threw the desktop operating systems DOS and Windows in as well.

“The European Commission used dubious reasoning to justify its decision in 1992 to do a backroom deal with Microsoft.”
      –Mark Ballard
“”Under the provisions of Article 58 of the Financial Regulation, [the selection procedure] was carried by direct negotiation with the company Microsoft Corporation, owner of the goods concerned (MS-WORD FOR WINDOWS, EXCEL, and operating systems DOS and Windows),” said the EC Information Directorate at the time.

“”The proposed contract with the company MICROSOFT will also extend to other office products offered by the company and are regularly requested from the Commission.”

“The EC was effectively giving Microsoft its desktop monopoly on a plate.”

Simon Phipps, who is now the OSI President, blasts “biased buying” which he blames for the slow adoption of Free software. He, like Ballard, is a Brit, so his analysis is EU-centric. He writes: “The market for public services is very large – almost 20% of Europe’s GDP in 2009 – and continues to grow. It’s consequently a valuable source of business and provides an economic stimulus to Europe that’s far more significant than any individual initiative a government might devise.

“It’s thus in Europe’s interest to ensure that market is as open as possible, so that the effects of the “stimulus package” of public procurement can benefit any qualified player. That’s especially the case in ICT, where there’s a tendency for legacy US vendors to lock in customers and thus lock out European participants.

“How do you do open procurement for ICT solutions? The answer, according to the European Commission, is to ensure that all procurement that requires tendering (and not all does) is specified in terms of the functions required rather than expressing a preference for the brands involved in the solution. That makes huge sense and is likely to create an open, competitive market, with all the cost savings you’d expect.”

“Antitrust action should be invoked.”Mr. Pogson, over in Canada, unearths some Comes vs. Microsoft exhibit to show the ill effects of the monopoly. “For decades,” he explain, Microsoft “has enslaved all of its customers, “partners” and ISVs (Independent Software Vendors). They have all been enlisted to prop up the monopoly in PC operating systems. The ISVs, while supposedly independent, were made dependent by offering “inside information”, special APIs to give advantages over competitors, lots of software-creation tools and, of course, backwards compatibility.”

This limited competition and impeded integration work, motivating bundled purchases and never-ending lock-in. In order to escape lock-in, ODF was introduced, but as we recently learned, it was not doing so well after Microsoft had embraced and ‘extended’ it too.

Speaking as one who works for a Free software integrator in the UK, this affects me personally and professionally. Microsoft has blocked competitors using backroom deals, technical sabotage, and digestion of threats. I saw it for myself; so have many who read this site. Antitrust action should be invoked.

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A Single Comment

  1. Needs Sunlight said,

    August 8, 2012 at 5:13 am

    Gravatar

    Anti-trust is too slow and even then lacks bite. For any remedy to have any effect, it will have to involve a ban of the sale of M$ products either temporarily or otherwise. The ban will have to be long enough that buyers will find it worth it to seek alternatives rather than just wait it out.

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