Microsoft, EU Looking at Antitrust Settlement

Apparently, Microsoft and regulators from the European Union (EU) are in preliminary talks to settle two separate antitrust investigations. The investigations include Microsoft's bundling of its Internet Explorer (IE) web browser with Windows and its dominant Microsoft Office productivity suite.

According to reports, the EU would like to settle the cases before Competition Commissioner Neelie Kroes leaves office at the end of the year. Kroes has worked diligently to keep Microsoft's market power in check over the years, but legal experts say she has "overplayed her hand" in both of these cases, and it looks as if a settlement makes sense for both sides.

In the case of Windows/IE bundling, the EU had sought to force Microsoft to include a so-called ballot-screen in the OS that would let consumers choose from among competing web browsers. Microsoft simply removed the bundling argument by removing IE from Windows: It announced that only in the EU would its upcoming Windows 7 come without the web browser. The decision left Kroes and her European Commission (EC) looking foolish, and it created a bifurcated market in which EU citizens receive a less capable product than the rest of the world gets. Ah, the benefits of over-regulation.

Meanwhile, in the lesser-known Office case, the EU is investigating whether Microsoft failed to make its Office document formats "sufficiently interoperable" with competing products. Microsoft's end run around this bit of silliness was to open its document formats as international standards and to support competing document standards in Office. How these actions didn't immediately end this wasteful and unnecessary investigation is unclear, but let's just say that Microsoft effectively answered this particular complaint long ago.

For Microsoft, settling makes sense because it gives the company a voice in its future. Had the EU simply ruled against Microsoft in either case, the software giant would have found it difficult to offer the same products in Europe as it does elsewhere, harming both users and its own businesses.

I'm all for a settlement: Each of these investigations is a farce, and the quickest and most equitable way for Microsoft to exorcise itself from this mess is to sit across from EC regulators and hammer out a compromise. Looking ahead, hopefully Kroes' successor won't be as open to frivolous complaints from Microsoft's competitors as she clearly was.

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