Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

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Monsieur Petit seems to have abandoned this blog in order to share his thoughts on an exclusive basis with US media. On Wednesday he was quoted again in The New York Times, this time in relation to yet another a new investigation on Microsoft’s non-compliance with a Commission’s decision.

As you may know, the Commission issued a statement announcing an investigation over Microsoft’s possible non-compliance with the 2009 commitment decision which obliged it to include a brouser choice screen to enable users to pick a browser instead of using the pre-installed one (until then Internet Explorer).

Microsoft has also issued a statement apologizing and explaining that:

“We have fallen short in our responsibility to do this. Due to a technical error, we missed delivering the Browser Choice Screen (BCS) software to PCs that came with the service pack 1 update to Windows 7. The BCS software has been delivered as it should have been to PCs running the original version of Windows 7, as well as the relevant versions of Windows XP and Windows Vista. However, while we believed when we filed our most recent compliance report in December 2011 that we were distributing the BCS software to all relevant PCs as required, we learned recently that we’ve missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1″.

The Commission has anticipated that it might impose “severe” penalties.

Keith Hylton (Boston University) has stated that the Commission is overreacting because “there may be a few people on the planet, living deep in forests on the Marshall Islands, who are not already aware that Microsoft’s Internet Explorer is not the only browser available”.

The well-informed and ironic reader who has conveyed Mr. Hylton’s statement to us responds that “whoever at Microsoft was not aware that they had to include a browser choice screen in Windows must also live deep in the forests in the Marshall islands, and whoever told the Commission in December that such error had not happened must live in the woods next door”.

We lack any precise information about this investigation but it’s hardly conceivable that Microsoft would do this on purpose, so, just as Microsoft says, this is most certainly due to an unfortunate mistake.

In any event, this story shows that antitrust law does perhaps not worry some companies as much as we usually think. Most importantly, the fact that nobody had noticed until now that 28 million copies of Windows had been sold since February 2011 without the browser choice screen says something about how compliance with antitrust commitments is monitored…

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Written by Alfonso Lamadrid

20 July 2012 at 1:43 pm

4 Responses

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  1. In the meantime, regardless of whether the lack of implementation was deliberate or not, Microsoft buyers had no ‘screen choice’ and – because default rules tend to stick – they are more likely to have downloaded Explorer rather than Mozilla or Chrome on their PC. Is this pure conjecture or solid facts support such a claim? According to the European Commission Director General for Health and Consumer Protection (http://www.europeanvoice.com/article/imported/behavioural-insights-in-the-commission/74597.aspx), the underlying rationale of the chosen remedy (‘screen choice’) would be based on behavioral research and, notably, on the framing effect. Yet no evidence seems to suggest that -bat the time of the Microsoft decision – the EU Commission conducted a behavioral study to substantiate the need and the foreseeable effects stemming from the introduction of a ‘screen choice’ .

    Alberto Alemanno

    20 July 2012 at 2:13 pm

  2. @Alfonso: true I have not been very active, but I have abundantly commented under the Microsoft reanimator post. And in that respect, I have been kept busy by heavy artillery from heavyweights, i.e. a judge and a Commission civil servant.

    @Alberto: very good point. The browser and WMP cases are all about end user inertia, you should read again the 2004 decision, where this concept was key, and documented. And in the 2009 decision, the Commission ordered a Consumer survey, which again was instrumental to prompt MSFT to settle: see §§50 and following of the decision http://ec.europa.eu/competition/antitrust/cases/dec_docs/39530/39530_2671_3.pdf

    Some self propaganda: On this, I co-wrote a paper with my excellent assistant Norman Neyrinck. We published it in JECLAP.

    @Readers: I’ll be back for good after my hols (in end August).

    Nicolas Petit

    20 July 2012 at 2:37 pm

    • A friend asked me at a GLCL event last week whether these comments and reproaches that Nico and I sometimes make to each other are serious or not (and it’s not the first time I get the question).

      Sorry to dissapoint those of you who like to see couples fighting, but they’re not. In fact, right after criticizing Nico’s recent inactivity last Thursday we had a beer together (he paid, for once!). It’s just that we are easy and enjoyable targets for each other… In fact, now that he’s on holidays he’s become an even easier target. I already have some ammo ready ;)

      @Alberto. Thanks for the comment! Triggering a public debate with a Commission’s Director General is not something that most people do every day, so congrats for that (and hope to see finally see you in Liébana soon!).

      Alfonso Lamadrid

      23 July 2012 at 3:22 pm

  3. Alfonso, in parallel and without looking at this blog, I had a similar approach (I thought myself at Mss.Spears, without a direct reference however…).
    The case is incredible and the fault is somehow on both sides (Keith Hylton comment on the situation is great).
    Procedurally speaking, Microsoft is in big problem. On the substance, however, things are much more nuanced and the market reality would need to be taken into account.
    My comments – and suggestions for the analysis of the EC – may be found at this link – http://blogul-de-concurenta.blogspot.ro/2012/07/microsoft-did-it-again.html.

    Valentin Mircea

    21 July 2012 at 4:06 pm


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