The European Union's antitrust case against Microsoft Corp. over Internet Explorer could be a nightmare for small- and medium-sized computer makers and set a dangerous precedent, a longtime trade group ally of Microsoft argued today.
Antitrust regulators at the European Commission want to force Microsoft to open Windows to other browsers, such as Mozilla's Firefox, Google's Chrome and Opera Software's Opera. That, said the Computing Technology Industry Association (CompTIA), a group with members throughout the technology food chain, would impose an unfair burden on computer manufacturers.
"The commission's proposed remedy is a 'must-carry'," said Lars Liebeler, CompTIA's antitrust counsel, referring to a requirement that the EU has hinted it will force on Microsoft. According to the commission, as well as regulatory filings in the U.S. by Microsoft, antitrust officials are considering ordering the company and OEMs to offer users a choice from several browsers when setting up a new PC.
"Such a remedy might include a requirement that OEMs distribute multiple browsers on new Windows-based PCs," Microsoft said in a January filing with the U.S. Securities and Exchange Commission.
"The commission may demand [Microsoft and OEMs] add an undetermined series of events to Windows to choose between an unknown number of browsers," Liebeler said. "This would interfere with PC makers' autonomy."
CompTIA, which has been granted "interested third-party" status to the case, filed a confidential statement with the commission today, taking Microsoft's side.
Liebeler, who has read the 154-page commission charges -- dubbed a "Statement of Objections" by the antitrust agency -- called the possible remedies "sketchy at this point," but noted that the phrase "ballot screen" was used by the commission to describe what users would face when they selected their preferred browser.
He argued that while all computer makers would be affected by such a decision, smaller companies would face the greatest burden because they don't have the resources to administer the changes.
More important, he said, was that a must-carry move by the EU would strip computer makers of their right to decide which software they include on their PCs, as well as set a dangerous precedent.
"If this case stands, anyone will be able to petition [the commission] and say, 'I'm not getting a fair shake and I want to be part of a must-carry'," Liebeler said. "It's obvious that a browser is indispensible, but we don't see any line between what the commission would think is indispensible and what's not indispensible." He cited antivirus software as one possibility.
The result could be anarchy. "Users don't want a computer that comes with 700 default setting choices," Liebeler said, adding that PC makers are already aware of users' resistance to bundled software, called "crapware" by some wags.
Microsoft is a member of the CompTIA, as is Intel Corp., "and every name on the world's leading OEMs," said Liebeler, who declined to name other companies. "The OEMs are driving this," he added, but admitted that Microsoft had a part to play in its objections to the commission's case. "Microsoft alerted us that there were small- and medium-sized OEMS that we were unaware of who oppose this," he acknowledged.
CompTIA made available a 10-page appendix to its objection that listed 90 European computer makers that believe the EU's anticipated action would be detrimental to their business.
The commission charged Microsoft last January with shielding IE from competition by bundling the browser with Windows, following up on a December 2007 complaint by Norwegian browser builder Opera.
Since January, several other browser makers, including Mozilla and Google, have joined the case as third-party participants. In April, a trade group that includes other Microsoft rivals, including Adobe Systems Inc., IBM and Oracle Corp., were also given access to the allegations.
Last week, Microsoft canceled an oral hearing set for June 3-5, citing scheduling conflicts that would prevent senior regulators from attending. Liebeler said the lack of a hearing probably wouldn't make a difference in the final decision. "I think that [the commission] doesn't work with the same transparency as a U.S. court," he said.
Measures that the EU is considering, Liebeler said, would also require Microsoft to redesign Windows so that IE code could be disabled. It could also demand that OEMs only install modified versions of the operating system that offers such a locking mechanism.
Microsoft has added a "kill switch" of sorts to Windows 7 that will let users prevent IE8 from running. Some rivals, including Opera, however, have said that the Windows 7 changes were insufficient.
Other groups have also recently weighed in on the antitrust case. Today, the Brussels-based IT lobbying group PIN-SME blasted a rival, the Association for Competitive Technology (ACT), for taking the Microsoft's side, and said small businesses "benefit only when a variety of open and standards-compliant browsers exist in a market of vigorous and undistorted competition."
PIN-SME had tossed its support behind the EU last month, while ACT had claimed earlier this week that the EU's likely remedies could break third-party applications written for Windows. "There is a significant risk that a broad range of applications written for the Windows operating system would be 'broken' by a requirement to remove or disable pieces of IE code," ACT said.
ACT represents about 3,000 software developers, systems integrators, and IT consulting and training firms. Microsoft is a member.
"The commission should dismiss this statement and do a proper investigation of the impact on OEMs," said Liebeler. "If you can't come up with a remedy that's better than the current situation, you shouldn't do it."
The commission has not set a timeline for its final decision.