Microsoft/EU Ruling: Consider The Consumer Too

The headlines seemed dire enough: 'Microsoft Smacked; Microsoft Dealt Severe Blow; Microsoft Crackdown.' All of it stemming from a European court's decision earlier today to uphold the $605 million fine levied against the world's largest software maker back in 2004 when the company lost its anti-trust case with the European Union.

The EU's Court of First Instance says the anti-trust commission was correct when it determined that Microsoft abused its dominant position in the software world to hold back competition in everything from operating systems to server software to media players.

Microsoft found today's news "disappointing."

Microsoft must now share Windows source code with competitors and offer a version of Windows without the Windows Media Player.

Of course, few consumers will actually want Windows without the media player whether they use that software or not. Which means the penalty, beyond the fine, which amounts to nothing more than a parking ticket for the company, won't do much. And worse, it may end up hurting consumers.

This statement this morning from Thomas O. Barnett, Assistant Attorney General for the U.S. Justice Department's Antitrust Division: “In light of the United States’ own antitrust case and judgment against Microsoft, and the importance of the computer industry to consumers and to the global economy, the United States has a particular interest in today’s CFI decision... We are...concerned that the standard applied to unilateral conduct by the CFI, rather than helping consumers, may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition."

He adds: “In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors. In the absence of demonstrable consumer harm, all companies, including dominant firms, are encouraged to compete vigorously. U.S. courts recognize the potential benefits to consumers when a company, including a dominant company, makes unilateral business decisions, for example to add features to its popular products or license its intellectual property to rivals, or to refuse to do so."

These are important considerations since the EU has made no secret that it will be going after Intel , is mulling action against Google , and who knows, may end up with Apple in its crosshairs as well. Any company with a dominant position that aggressively seeks to protect that position could be fair game. And if the courts find fault, the remedies run the risk of punishing companies, as well as consumers as a kind of antitrust collateral damage.

Something to consider since there are so many other cases, with potentially huge ramifications for some of the biggest names in technology. I'm not saying Microsoft's behavior was unfairly punished. Quite the contrary. It's just that the courts ought to consider consumers just as much as they consider competitors when doling out decisions.

Microsoft has not decided yet whether to appeal today's ruling.

Questions? Comments?