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2/9/2009
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Microsoft Nearly Killed Browser Competition, Mozilla's Baker Charges

The Mozilla Foundation chairperson endorsed the European Commission's finding that the link between Windows and Internet Explorer harms competition, innovation, and choice.

Three weeks after the European Commission told Microsoft that it objected to the ongoing linkage between Windows and Internet Explorer, Mozilla Foundation chairman Mitchell Baker issued a ringing endorsement of the European Union antitrust group's findings and offered Mozilla's expertise to help craft a remedy.

"The damage Microsoft has done to competition, innovation, and the pace of the Web development itself is both glaring and ongoing," said Baker in a blog post on Friday. "There are separate questions of whether there is a good remedy, and what that remedy might be. But questions regarding an appropriate remedy do not change the essential fact. Microsoft's business practices have fundamentally diminished (in fact, came very close to eliminating) competition, choice, and innovation in how people access the Internet."

On Jan. 17, the directorate general for competition of the European Commission sent a Statement of Objections to Microsoft. It found "that Microsoft's tying of Internet Explorer to the Windows operating system harms competition between Web browsers, undermines product innovation, and ultimately reduces consumer choice."

The European Commission gave Microsoft eight weeks to reply. In 2004, the Commission ordered Microsoft to create new versions of Windows without specific multimedia technologies and to disclose some of its protocols to enable the interoperability of competitive products.

As an interim statement, Microsoft said that it was studying the objections and is committed to complying with the law.

In its most recent quarterly SEC filing, Microsoft lays out what might happen if the Commission demands that Windows and Internet Explorer are separated.

"We may have to choose between withdrawing products from certain geographies to avoid fines or designing and developing alternative versions of those products to comply with government rulings, which may entail removing functionality that customers want or on which developers rely," the filing states. "We may be required to make available licenses to our proprietary technologies on terms that do not reflect their fair market value or do not protect our associated intellectual property."

Practically speaking, Microsoft could be required in the European Union to distribute competing browsers with Internet Explorer, to provide an installation screen that presents consumers with a choice of browser, or to strip Internet Explorer from Windows.

Google, asked whether it had submitted information to the Commission about Internet Explorer, didn't immediately respond. Mozilla Corp. derives the majority of its revenue from its advertising deal with Google.

Firefox 1.0 was released in November 2004 and in just over four years, it has managed to capture 21.53% of global browser market share, according to Net Applications. As a point of comparison, Apple's Safari browser, released as 1.0 software for Mac OS X in June 2003 and for Windows XP and Vista in June 2007, has 8.29% market share.

Microsoft Internet Explorer had 91.27% market share in December 2004, according to Net Applications. As of January 2009, Internet Explorer had 67.55% market share. A positive reception for Internet Explorer 8 and Windows 7, however, could reverse that trend.

Despite Firefox's rising market share, Baker argues that the browser's relative success doesn't undo the damage she claims Microsoft's actions have done. "The drag on innovation and choice caused by Microsoft’s actions remains," she said. "At Mozilla, we work to reduce this drag through direct action, and the results are gratifying. If the EC can identify an effective remedy that also serves to improve competition, innovation and choice, I would find it most welcome."

When Microsoft formally responds to the Commission's concerns next month, it has the right to request a hearing. The Commission won't make a final determination about whether Internet Explorer can remain integrated with Windows until after such a hearing.

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