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European Antitrust Officials Target Microsoft over Internet Explorer

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European Antitrust Officials Target Microsoft over Internet Explorer

Statement of Ryan Radia, Information Policy Analyst

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Washington,
D.C., January 20, 2009—The
European Commission may
order Microsoft
to strip Internet Explorer (IE) from certain versions of
Windows, according to a preliminary ruling against Microsoft stemming from a
complaint
brought by Opera. Opera claims that
Microsoft is “abusing its dominant position” by bundling IE with Windows, and
consequently denying consumers “genuine choice” among web browsers.

If the European Commission upholds Opera’s complaint against
Microsoft, it wouldn’t be the first time Microsoft has been found guilty of
antitrust violations stemming from applications bundled with Windows.

Back in 2004, the Commission
ruled that it was illegal
for Microsoft to bundle its Windows Media Player
with Windows and ordered Microsoft to offer a Media Player-less version of the
operating system. Microsoft responded by unveiling the wryly named “Windows XP
Reduced Media Edition.” Unsurprisingly, the European Commission rejected the
name
, so Microsoft renamed the OS “Windows N.”

Despite Windows N’s fairly neutral-sounding name, consumers showed little
interest
in Windows N when it hit the shelves. It’s quite obvious why
Windows N was a flop–why would anybody want to run an operating system lacking
useful components, especially when plenty of alternatives
are available online at the click of a button?

The same reasoning is sure to relegate a browserless Windows
(Windows: Reduced Internet Edition, perhaps?) to commercial irrelevance. Such a
product would be placed on shelves solely to satisfy regulators convinced that
they’re somehow “protecting” consumers by ensuring inferior products can be
had.

How would the average user even select a preferred browser
in the first place without a pre-installed browser? While OEMs could always
pre-install a browser, anyone who wanted to install (or reinstall) a
browserless version of Windows from scratch would need to jump through hoops just
to get online.

More to the point, Opera’s claim against Microsoft looks
downright absurd given the reality of today’s increasingly
competitive browser marketplace
. Despite IE being bundled with Windows,
Firefox has gained significant ground on IE in recent years. Four years ago, IE
had 91%
global market share
, while Firefox hovered around 3.5%. Now, Firefox is
almost at 21% market share, and IE recently dropped below 70%.

Firefox’s ascent did not happen because of a mass exodus of
users from Windows to other operating systems. To be sure, Windows has faltered
a bit as of late, but Firefox has gained the following of a massive number of
Windows users who elected to download and install Firefox as a replacement for
Internet Explorer. This illustrates that users are perfectly willing to pick
their favorite application for a given task, even if that means downloading a
third-party app on the Internet. Plenty of other programs, like VLC and Google Desktop, have taken off among
Windows users even though these apps largely duplicate the functionality of
bundled Windows components.

Where does all this leave Opera? Unlike Firefox, Opera is
still a laggard in terms of market share. Blaming Opera’s inability to gain a
large user base on the bundling of IE with Windows, however, is entirely
misplaced. The folks at Opera may feel that going after Microsoft might help
them peel off a few users - or, at least, get Opera’s name out there in the press - but
Opera’s biggest enemy is certainly not Internet Explorer.

CEI is a non-profit, non-partisan
public policy group dedicated to the principles of free enterprise and limited
government.  For more information about
CEI, please visit our website at www.cei.org.