It was yesterday in the Herald Tribune, but the news was lingering around even before. Really soon the European Commission will finalize a settlement with Microsoft, possibly closing two big antitrust issues: the tying of the browser with Microsoft Windows and the withholding of interoperability information. I have had the opportunity to comment on the proposal of Microsoft earlier this August, because the Commission has formally asked the opinion of FSFE, which is an interested third party in the procedure. I hope things have improved from then, because there were serious gaps in the proposed commitment.
The point is that the current Commission is going to step down in a few weeks, and Commissioner Kroes – who has an incredibly good track record on the Microsoft case – might feel the urgency to close everything behind her, leaving the office empty and her case teams without a case. But at which conditions?
To use my good friend Jeremy Allison's words, will we be able to snatch defeat from the jaws of victory?
Where do we stand?
The Commission has achieved something untinkable. Something the biggest antitrust experts told us was impossible. We won – beyond any foreseeable measure – the entire Microsoft litigation, a landmark case which is going to be seminal in technology for the years to come. A Free Software project like Samba has received the right to see all the interoperability information and to freely implement them in a GNU GPL project in a compatible way. Something that we were told had the same chances to happen as a snowball in hell.
This has given the Commission an unprecedented authority to demand the fixing of other outstanding issues – and there are many. A very detailed and well reasoned statement of objections has been served on Microsoft, opening a large avenue to a new decision and remedies, this time backed by the huge precedent of a case about the same company and for very similar anticompetitive practices. No surprise then that Microsoft was and is very keen on avoiding another ordeal like the one it has endured so far.
The party in the need to close the matter and to “move on” (using Brad Smith's own words) is Microsoft. The Commission does not need it, the Commission can go for a solution without a settlement unless it is a very good settlement, but the one I have seen is not quite so. If the matters have to be solved — and Heaven knows how they need to be — they must be really solved. A layer of fresh paint over an old wall would not help much.
What is missing
The single biggest issue is patents. The current WSPP agreement does not contain any meaningful provision or license or promise or non-assertion pledge or anything that is useful to Free Software projects. Without that clearance, once everything is over, who is going to stop the patents to be asserted or, worse, merely threatened (call it “FUD”, “patent rattling”, “whatever”)? Microsoft has been very clear to reserve this right. If it is home free with a broad undertaking, there will not be any real pressure against the assertion of the patents, apart from the reaction of some friendlier companies and of the OIN. We have seen just a small preview with the TomTom case.
Other points are crucial. With regard to the web browser issue, the most likely remedy to be imposed is a “must carry” provision. In other words, since the Internet Explorer (IE) dominance has been allowed to endure for at least a decade, the simple un-bundling of IE frorm Windows is deeply insufficient in order to re-establish an equal footage amongst competitors. This is because the network effects are so deeply entrenched into the market that this remedy alone would be ineffective. Therefore Microsoft should be forced to re-establish an equality of arms by providing a facility whereby people can get alternative browsers as easily as they get IE. In the proposed settlement, this is reduced to a simple “ballot screen”, in other words a (so far badly designed) web page which offers some link to download the competitors. This page is to be presented via Internet Explorer (!). So much for the “equality of arms”. It is clear that without allowing the competing browsers to be pre-loaded like IE is pre-loaded, the others will remain at a competitive disadvantage to say the very least. More so if the alternatives are presented as — well — alternatives and there is no viable mechanism to change what is the default browser (removing IE, if so is desirable to the end user).
Also the interoperability side lacks some basic commitments, besides the patent issue. It is not even par with the agreement that the PFIF entered into under the WSPP regime, including the lack of a serious monitoring regime to ensure compliance beyond private litigation (in the UK, as if it was within everybody's reach…).
Page one of the perfect negotiator handbook is “never look like you need the agreement more badly than the other part does”. Row number two reads “and by the way, try not to be in that position, really”. If you are not in a position to leave the table at any time, you will invariably end up with a worse deal than you deserve.
As I said, the party which needs a settlement is Microsoft. The Commission might want a settlement, but only if it brings greater good to the consumers and to the internal market. Surely not whichever deal. The common opinion conversely is that Microsoft will go away with an unexpectedly good settlement. And if the settlement is any close to what I have seen, hence the common sense will be right.
If this will be the case, and still I trust it will be not, the apparent victory of the Commission forcing an undertaking out of Microsoft will indeed a moot one and will set a bad precedent. I am sure Commissioner Kroes will not want to leave her office playing her drums just to turn out having been too eager in one year's time. This is an epochal battle, the results are not short termed, they are on the long run.
But wasn't it over? Hadn't Microsoft been bashed enough?
The best trick of the Devil — the Church says — is to convince everybody that it (he?) does not exists. By no means I want to make any similarity with the subject (I am not the Church and Microsoft is not the Devil); but the analogy stands for the present situation. I keep hearing, even from people who is very concerned about antitrust, that the Microsoft stuff is something belonging to past ages, that now the threats are others, that it is now the Internet space that matters.
I couldn't agree more with the last part, but the proposition that threats to the market come from other sources leaves me puzzled. Still today, if I go out to a market shop, I have really hard times finding a computer which is not pre-loaded with Windows-something, and almost invariably this is a Mac. Even the very promising netbook market (loads of GNU/Linux on low-end machines) has been thwarted and now in a few months' space everything is Windows XP preloaded, thanks to marketing strategies which go — apparently — as far as giving near-free (as in “free beer”) licenses to swipe competition (isn't this an anticompetitive move, such as predatory pricing?).
And the future will bring Silverlight. And the future will bring OOXML mandated by public authorities as if it was an open standard. And by the way, I am still awaiting the first attempted implementation of ISO/IEC IS 29500 (what the standard is called) because Microsoft Office's file format is not even close to be that, and it is not even ECMA 376. It is a proprietary, undisclosed file format. To add insult to the damage, I start hearing that even those corrections that were hurried in during the Ballot Resolution Meeting in order to pass the standard like a square pin into a round hole are now rolled back very quietly in JTC1 SC34 – hijacked by Microsoft – because of lack of interoperability with MS Office. Which incidentally confirms my assessment that the implementation is the standard and the standard is the implementation. The process we underwent to approve or disapprove an international standard was merely a sham.
Those trying to portrait the current situation as a re-normalized competitive environment are either making a fool of themselves or plainly in bad faith. War is not over and it is far from being won. It is like when you start taking antibiotics: you must be taking them all the way through, otherwise it is even worse than not taking anything.
Is there any comparably bad situation that needs Commission's attention instead and for a change?
No, there isn't.
I am not a big fan of big corporations trying to squash competition even when they are doing a (sadly long) stretch of the road with us fighting for Freedoms. But I am sure I am not using pink glasses when seeing that there is no comparably bad situation in the technology market.
Take Google. Google is being said to be monopolist. Let's assume it holds a dominant position, but where? In the online advertisement market. I am not saying that Google should be free to abuse said position (yet I fail to see this being a case), they are simply not in a position to control a platform and leverage it to impose a proprietary technology over better or simply equally viable open/free/multiplatform alternatives. I would be happy to see Google releasing more of the Free Software code they are keeping for themselves, but this is not even close to put the market on a stranglehold for two decades and doing any sort of things to thwart any meaningful competition on the platform. Google dominance, if any, is not able to control a single bit of technological advancement. There can be privacy issues as well, but they have been adequately addressed, and more measures can be taken.
Or take Oracle. I doubt that Oracle is dominant under any metrics, they have highly attractive proprietary software and have lately committed to some Free Software initiatives in the lower end of the database market. But there are alternatives in the market, I have clients which produce enterprise-class software that can use Oracle as well as many of its competitors without a hassle. I see no network effect, I see very little barrier to entry, what I see is only that people rely on a product as well as a company standing behind it. Whether this trust is deserved or not is beyond my grasp, and I could not care less.
But Microsoft has been quick to go to the Commission and complain about Oracle buying Sun (and through it the corporate soul of MySQL), and quite puzzingly the Commission decided to go for a Phase II examination. While the merger is in stand-by there are big losses for the Free Software initiatives of Sun. I am determined to do what I can to have this merger cleared, because I believe it is crucial from a strategic point of view. I would have preferred Sun to remain independent, but this was not possible, period, and the alternatives, well, I'd better not think about them.
This is to say that priority #1 is to keep a close eye on the only overdominant company in the IT market, the same company that has so far scored lowest in respecting competition, users, which has made a mockery of the once blessed standardization process, inflicting a serious blow to the credibility of the entire system (not that it did not deserve a good wake-up call anyway).
The most important actor so far, the one who has been able to achieve sound results in resolving the outstanding issues (which are increasing, not decreasing) has been the Commission. So I urge it to keep in a straight line. If this means that the agreement – if any – will come bearing the signature of a new Commissioner, who cares, anybody will know it is just the completion of a big achievement entirely attributable to the present administration.
One day we will be saying “Microsoft is a company like any other, and a good citizen in the software market”, as we are now saying of IBM (which invented some of the current anticompetitive tricks). But this day is not today, and this day is not even near to come. We must keep serious pressure in order to allow those forces within Microsoft that are advocating a radical change. This way those forces will be allowed to grow and take over a corporate culture which – behind an external facelift – does not show to be changing.