Microsoft's European Slap on the Ass

Just in case there was any doubt that the U.S. Senate is for sale (or perhaps just for rent), we now have Patty Murray, a Democrat from Washington, asking the Commander in Chief to "engage" the European Union over their $600 million slap on the ass to Microsoft for violating EU law.

Sen. Murray really ought to choose her words more carefully; Mr. Bush might just take her up on the suggestion and invade Belgium.

The case was very much like the previous anti-trust cases against Microsoft in the U.S., such as the one over their bundling IE with Windows and interfering with other browsers. The issue in this case was Windows Media Player, which Microsoft (just like in the browser situation) insisted was an integral part of the OS which couldn't be removed, and which others (just like before) demonstrated to the court was not true at all. The difference is that Microsoft funds the elections of people like Sen. Murray, but they don't have that kind of influence on the EU government. So the EU actually threw the book at them, rather than just waving it over their heads and backing down.

What Microsoft seems to be complaining about is the notion that they have to know and abide by the local laws of whatever sovereign nations they do business in. Well, duh.

The Senator from Microsoft is claiming that this is going to cost American jobs and hurt our economy. Which is bullshit.

In the short term, it means Microsoft is going to have to spend some extra money on programming to make Windows XP and Windows Media Player comply with European law. Real and Apple (developers of RealPlayer and QuickTime media players, Microsoft's biggest challengers) will have a brief boom in programming activity as well (taking advantage of the newly-opened Windows media interfaces), followed by (one would expect) some renewed prosperity from this new opportunity. That's a net gain in jobs. That's what competition does in a free market: it increases economic activity. The MS monopoly - with a single company writing nearly all of our software - is one of the things killing it. Give Windows a really good cracking open, and you'll see such a blizzard of economic activity in the tech sector that it'll take years to settle down. (Hell, even if that post-monopoly economic revival helped Bush get elected this fall, I think it might almost be worth it.)

OK, this court ruling would take over half a billion dollars out of Microsoft's cash reserves and send it to Europe. That wouldn't be good for the American economy. Maybe if the US prosecutors and courts had the courage to impose fines of this size when they had the chance, Microsoft might have discontinued their anti-competitive bundling, and avoided this fine in the first place.

The bottom line is that Microsoft's been violating EU law, and the usual alternative to a fine is jail time. Would Sen. Murray prefer that Bill Gates spend some time in a Turkish prison instead?

Besides, this fine isn't exactly a crippling blow to a company with tens of billions in cash on hand. It's more than a slap on the wrist, for which the European court should be applauded. But it's really not much worse than a spanking, which might prevent Microsoft from sitting down in Europe for a while, but won't change their overall attitude.