Why Microsoft is a regular to Almunia’s

Joaquín Almunia, Vice-President of the EC, delivering a Press conference on 17 July 2012 on a case of abuse of dominant position concerning Microsoft. This was one of many occasions that Commissioner Almunia had to deal with Microsoft’s attitude towards fair competition.

In the years of globalisation, free movements of capital, goods and to a lesser degree of labour, have raised exponentially citizen’s wellbeing in our western economic volume and not only. This achievement has to be totally credited, to the opening of national markets to international competition. At the same time though globalisation has created new opportunities for some heavyweights, to become world leaders in their fields.

In this way the “laissez-faire laissez passer” environment has opened the appetite of mighty multinational businesses, which having acquired a world-wide dominant position, are tempted to exploit this new possibility. The next step is obviously to do whatever it takes, in order to reduce competition on a mega-scale and increase profits, without further promoting efficiency or productivity.

This is the well-known problem of free markets, where absolute freedom leads to absolute economic subjection of free societies, to a handful of companies or persons. Such dangers are increasingly menacing our wellbeing and the competitive functioning of markets with unnecessary obstacles. A lot of business sectors dominated by a few global heavyweights, have been and still are under the threat of cartelisation.

However, most prone to oligopolistic structure or exploitation of dominant position and cartelisation are a number of firms in industries, which are less bounded by geographical and national boundaries. Electronically traded products on digital market platforms, along with ICT services and goods offered over or for use in the Internet have become the main targets for cartelisation or exploitation of dominant position. Now let’s come down to names and investigations.

The first to exploit the possibilities to falsify competition on a global scale were the big banking groups, which control all major payment systems and the main financial market platforms. Then it’s global leaders like Microsoft and some other digital constellation firms, which control the functioning of almost all our PCs and the communication abilities of those machines. Google is also implicated in this game and has attracted the interest of competition guardians. But let’s take one thing at a time.

As far as the western banking system is concerned, Washington and Brussels are jointly paving the way to turn the big banks into mortal entities. This will be a distinct change of position for the financial sector leaders, from the undead status they have reached. This line of action may take some years to reach targets, but the ball in now running. Microsoft however is a peculiar case and an increasing problem for Europe, just because this colossal firm is American, and concerted action of EU and the US against its preponderance is hindered.

The European Commission seems to have understood this problem and over the past years has repeatedly question, monitor and punish Microsoft’s’ behaviour, with limited help from Washington. Only last June the European Court of Justice upheld a Commission’s decision to impose a huge fine on the software giant. The Court reduced only slightly the fine imposed to Microsoft by the Commission, from €899 million to €860 million. A few days later Joaquin Almunia, Vice President of the European Commission responsible for Competition Policy, announced a new investigation against Microsoft by stating, “I am announcing today the opening of an investigation into the possible non-compliance by Microsoft with the commitments on web browsers it gave to the Commission in 2009”.

To get an idea about how much and in what many ways Microsoft is implicated in competition infringing activities, it suffices to quote the Commission’s competition infringement cases against Microsoft:

M.6474, GE/MICROSOFT, M.6281 MICROSOFT/SKYPE, M.5227 MICROSOFT/YAHOO SEARCH BUSINESS, 39784 OMNIS/MICROSOFT, 39530 MICROSOFT (Tying), 39294 MICROSOFT (ECIS complaint), 37925 PO/MICROSOFT+NTL, 37924 PO/MICROSOFT+UPC, 37792 MICROSOFT, M.3445 MICROSOFT/TIME WARNER/CONTENTGUARD JV (4064).

In total, hundreds, if not thousands of companies have been investigated and many have paid hundreds of millions of euros in fines for competition infringements, but only Microsoft is such a regular customer of Joaquin Almunia, in his capacity as guardian of fair competition in the European Union.