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The European Commission on Wednesday announced that it will test a new Microsoft (Nasdaq: MSFT) plan that could end a long-running battle the two entities have been having over Web browsers.
Microsoft has, in essence, agreed to offer Windows users a choice of browsers bundled into its Windows operating system. It will include mechanisms to let users turn off Internet Explorer (IE) and divorce applications from IE. It will also let OEMs install any browser they want with Windows.
In addition, Redmond addressed another issue troubling its relations with the EC -- interoperability -- by committing to openning up the APIs (application programming interfaces) for its software products to all developers and support certain industry standards in its products.
Resolving the Browser Issue?
The EC, which is the enforcement arm of the European Union, said that it will on Friday invite comments on Microsoft's proposals for resolving the battle over the browser. Consumers, software companies, computer manufacturers and other interested parties have one month to file their comments.
"We welcome today's announcement by the European Commission to move forward with formal market testing of Microsoft's proposal relating to Web browser choice in Europe," said Microsoft general counsel Brad Smith.
Microsoft's new proposal is the result of feedback from various sectors over its previous proposal, which it tabled with the EC in July. It incorporates 20 "substantive" changes, including distributing ballot screen software with Windows; ensuring that competing browsers can be downloaded from the ballot screen more quickly and easily; and changing the order of browser icons on the Windows 7 taskbar and the ballot screen on Windows so that IE no longer comes first.
Redmond suggests that the changes run for five years from the time the EC approves the proposal, and that either Microsoft or the EC can conduct a review after two years.
Once the comments are in and have been evaluated, the EC can, under Article 9 of Regulation 1/2003, decide to make the commitments legally binding on Microsoft. That would mean there would no longer be grounds for antitrust action by the EC. However, Microsoft won't get a free pass -- this does not mean the EC will have explicitly ruled on the antitrust issue.
Peace in Our Time?
By not issuing an explicit ruling, the EC will have left the door open for future action against Microsoft. "Once a government body like this gets it teeth into something, it's like a dog with a bone, and it won't let go unless something else distracts it," Rob Enderle, principal analyst at the Enderle Group, told the E-Commerce Times. "I expect the European Commission will be making Microsoft's life miserable for several more years just because they can."
Microsoft's competitors have already begun criticizing the new proposal. ECIS, the European Committee for Interoperable Systems, whose members include IBM (NYSE: IBM), Adobe (Nasdaq: ADBE), browser vendor Opera, Oracle (Nasdaq: ORCL) and Red Hat (NYSE: RHT), and which has been battling Microsoft in Europe, has blasted Redmond's latest proposal as inadequate.
More changes to Microsoft's proposal are needed, Hakon Wium Lie, Opera's chief technology officer, told the E-Commerce Times. " The proposal announced today will not effectively remedy the abuse," he said. "But it can be made effective with modest changes. We look forward to participating in the market test and to improvements being made to the remedy."
Still, the chance of another Microsoft-EU rumble over the browser remains. "Is this going to be the end of the EC's hounding Microsoft over Internet Explorer? Absolutely not," said Laura DiDio, principal at ITIC. "The EC will continue to haunt Microsoft with the same obsessive fervor as Inspector Javert haunted Jean Valjean in Les Miserables."
Opening Up the APIs
Microsoft is also offering the EC a carrot to help resolve the dispute over IE swiftly. It has suggested a solution to another battle it's engaged in with the EC, over openness. It has offered to open up the APIs of its software products to developers and to adhere to certain standards.
This will cover its Windows, Windows Server, Office, Exchange and SharePoint products. It represents the single biggest legal commitment in the history of the software industry to promote interoperability, Microsoft's Smith claimed.
Developers, including the open source community, will have access to technical documentation to help them build products that are compatible with Microsoft's, Smith said. Redmond will also support "certain industry standards" in its products and document how these standards are supported. Microsoft will offer legally binding warranties to third parties, Smith said.
Although this is on a separate track of negotiations under EC rules, Microsoft will adopt it in final form once the EC adopts its commitment to resolving the dispute over IE.
The result could benefit Redmond. "I think this will have a positive impact on their business because it enables creativity, and the industry desperately needs creativity at the moment." Enderle said.
However, he warned that this will depend on how people use Microsoft's proposed new openness. "If people use Microsoft's openness against them more than they use it to create new and wonderful products, this could backfire," Enderle explained. "This goes to the core of why there are two groups in Microsoft -- the open group, which believes in the integrity of people in general, and the traditionalists, who have learned over time that trust is often not a good thing to believe in."
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