Strategy Session

Sep 19 2007 12:00AM | Permalink | Email this | Comments (1) |
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It’s tough when the rules are rewritten and what you thought was, isn’t anymore. That’s what happened to Microsoft this week.

The Court of First Instance in Luxembourg said the European Commission acted properly in 2004 when it found that Microsoft had abused its near-monopoly position. Microsoft’s bill in fines and penalties could reportedly reach $2.77 billion.

What will this ruling mean to other tech cases? Does this spell trouble ahead for Apple, which dominates online music downloads? What about Intel?

In its summary, the Court reiterated that Microsoft had abused its market power by bundling a digital media player to Windows, and denied competitors information they needed to make their computers compatible with Microsoft’s software. The Court also told Microsoft to obey a March 2004 Commission order to share confidential computer code with competitors.

Will this ruling stifle others from innovating? Will companies need to think differently about what features they add to products for certain regions of the world? Intel and Rambus are probably watching the developments from this ruling very carefully. The European Union brought a case against Intel this summer and accused it of using marketing incentives to deter customers form dealing with Advanced Micro Devices. As for Rambus, the European Union is looking into the company’s alleged manipulation of standard-setting bodies to lock in patent royalties. (See this Wall Street Journal article for more details and coverage of the ruling.)

This antitrust ruling will undoubtedly result in many companies deciding to reexamine their business practices for the European market—and other markets around the globe. On the other hand, the ruling could be a positive development for innovative smaller companies.

How the ruling will impact other dominant companies and the way they conduct business around the world is yet to be seen. Do you see this ruling as a good thing for tech companies, and business in general?