RSSWindows 7 E: Microsoft's sensible response to Europe
By Joe Wilcox | Published July 15, 2009, 3:59 PM
Yesterday, in a Windows 7 for Developers blog post, Microsoft revealed more details about the special version of Windows 7 for the European Union. The company isn't ripping out Internet Explorer 8 so much as using the "Turn Windows on or off" tool to disable the browser. For all practical purposes, IE8 won't be available to end users or third-party applications. However, Internet Web Applications components will remain.
About 30 days ago, in a brilliant solution to a troubling problem, Microsoft announced plans to release an "E" version of Windows 7 sans the browser. Windows 7 E will be exclusively distributed in the EU, where the European Competition Commission is nearly ready to officially rule that Microsoft's bundling Internet Explorer with Windows is an anticompetitive act. The European Commission is currently entertaining remedies, which are rumored to include a proposal for presenting Windows users with a choice of browsers to set as default during installation.
Microsoft's decision to offer Windows 7 E in Europe makes loads of sense. The company made a tough call, but a good one. The European Commission and Opera can complain, but Microsoft is thinking business, which is the right priority.
I'm not defending Microsoft's tactic of bundling -- in legal parlance tying -- Internet Explorer to Windows, nor am I reproaching it. I encourage people to stake out their opposing positions in comments. But I do commend Microsoft's pragmatic solution -- and one that clears the way for Windows 7's worldwide launch.
European regulators can whine and complain about how oh-so terrible is IE, but that contention ignores that:
- Many businesses depend on Internet Explorer
- The new browser war is on mobile phones, where neither Windows nor IE is dominant
- Desktop browser competition is fiercer than ever (Firefox usage surpasses IE in some European countries)
Lots of European businesses, consumers and developers will be sorry to lose IE from Windows. Some will feel slighted, like they're being treated second rate compared to people in every other region in the world. Surely there will be backlash -- some pointed at Microsoft for making the decision, but perhaps more to European regulators for creating the situation.
Windows 7 E is a brilliant business maneuver, because:
- Microsoft can comfortably plan on launching Windows 7 worldwide on October 22nd, regardless of the EC's remedy.
- The solution is reasonable enough that the European Commission will have a tougher time imposing a tougher, alternative remedy.
- By shipping IE on a separate disc, Microsoft also can offer Windows Live Essentials and other software -- all technically unbundled but easily accessible.
Each of these business goals/benefits needs further explanation.
Windows 7's Launch. Microsoft is most vulnerable to competitor interference right before launching a new operating system. The company also is most likely to make concessions about Windows in the months before launch. In early 2001, Kodak complained to the New York attorney general about Windows XP's new, bundled photo features. At that time, Microsoft hadn't yet settled its US antitrust case and was under strict scrutiny form the Justice Department. Microsoft made changes that allowed Kodak's software to be a default option. Microsoft made other concessions -- some of them preemptive -- such as ceding control of desktop icons, ahead of Windows XP's launch.
Competitors also circled around Windows Vista, pointing fingers and crying out for Daddy Trustbuster to do something about Microsoft. Google complained about Internet Explorer 7 search defaults, which the Justice Department decided were flexible enough -- certainly as much as Firefox. Nevertheless, Microsoft modified search after Google also complained to the European Commission. Security competitors/partners also called on the EC, leading to other Windows Vista changes.
The newer situation is considerably more problematic for Microsoft, because the European Commission is likely to reach a decision after Windows 7 is certified gold and before its release to volume-licensing subscribers on September 1. The EC is taking suggestions from many parties, including Microsoft competitors, now.
Limiting EC's Options. Even if the European Commission demands more or something different, Microsoft has established a framework that should allow a stay of any remedy for appeal. No one should doubt Microsoft's primary objective: The simultaneous worldwide launch of Windows 7 in October. Last month, Dave Heiner, Microsoft's deputy general counsel explained in a blog post:
"The worldwide launch of Windows 7 is fast approaching, but a pending legal case raises concerns about the sufficiency of competition among the Web browsers that are available to Windows users in Europe...We're committed to making Windows 7 available in Europe at the same time that it launches in the rest of the world, but we also must comply with European competition law as we launch the product...this is a big step for Microsoft. But we're committed to launching Windows 7 on time in Europe, so we need to address the legal realities in Europe, including the risk of large fines."
Microsoft's approach clears way for Windows 7's launch, while also drawing a line before the European Commission. But the EC can still sock Microsoft, because of the extent of IE8 removal and the ease with which it could be restored.
Competitive Landscape. Microsoft also unexpectedly is getting some help from Google, which last week announced plans to release Chrome OS for netbooks. Microsoft can argue that Windows 7 E removes the browser at a time when Google is preparing a browser-based operating system. Surely, given this potentially market-changing move, Microsoft can assert that it has offered the European Commission remedy enough.
Then there is Opera, which immediately and unsurprisingly complained about Windows 7 E. The EC's proposed plan would assure Opera free distribution with every copy of Windows sold in Europe. Microsoft's alternative actually gives nothing to competitors, Opera in particular. Taking something away doesn't give something instead. By the way, Opera filed the complaint that started the EC's browser investigation.
Microsoft is planning to ship separate application discs with Windows 7 E retail versions. By distributing CDs with IE and other Microsoft software, the company gets some bundling benefits without tying software to Windows. It's a brilliant business response to companies practicing competition by litigation.
"Microsoft can argue that Windows 7 E removes the browser at a time when Google is preparing a browser-based operating system. Surely, given this potentially market-changing move, Microsoft can assert that it has offered the European Commission remedy enough."
No, because Microsoft called off its own hearing, so it cannot argue in any way, except to the media and informally, and the remedy does not relate to unreleased competitiors but to ten years of potential abuse. To be precise the Commission picked up a case of misconduct where no one expected her to go after, but the law is pretty solid.
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|What you have to understand in greek mythology terms is that the Commission DG Competition is the god and a self-castration of the heroe Microsoft does not relate to the remedy in any way. The gods punish you.
The Commission is the authority which decides, and it is like a Court. Microsoft always communicates as if it was on the same level. That is extremely arogant. Even more Opera and the competition authority are also not on the same level. Norwegian Opera reported the offence. The Commission investigates it.
"Microsoft is planning to ship separate application discs with Windows 7 E retail versions. By distributing CDs with IE and other Microsoft software, the company gets some bundling benefits without tying software to Windows. It's a brilliant business response to companies practicing competition by litigation."
Brilliant? What am I supposed to think about those idiots? Tying is a legal term, not a technical term and such bundling/tying is *perfectly* illegal under the existing law.
Google OS -- Google is not a convicted monopolist under the law. So it can still do some bundling and cross-promotion. The Google OS by the way is mostly driven by hardware manufacturers from South East Asia, Google is just the consumer brand and Google does not make any money with it. It is just that Google gunpoints at the Microsoft cash cows, Windows and Office.
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|Gosh Joe, your American justice system seems so interesting. The accused gets to choose his sentence and how he will serve it.
Unfortunately for Microsoft, Europe is different and the regulators will decide how Microsoft does business here. If Microsoft doesn't cooperate maybe they won't be allowed to sell Windows 7 at all.
Which would disappoint many and especially people like myself who pre-ordered Windows 7.
Microsoft has effectively spit in the eye of the judge. Not a wise move.
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|Microsoft does not sell IE, Mozilla does not sell FireFox, I've recently downloaded Chrome, Safari and Opera Unite for free. So where exactly are these browsers competing? I am sure they get a warm fuzzy when their user agent percentages go up, but that doesn't pay the cell phone bill.
What does Microsoft have to loose by putting 5, 6 or a dozen browsers on a separate Internet software disc so their users can try any or all of the browsers available?
Looking at the browser is like looking at a finger instead of where it's pointing. Microsoft doesn't really care what browser you use, but it does care about default home pages and search engines, and most of all it cares about development tools, proprietary formats, and IP.
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|What does Microsoft have to lose? the cost of putting those browsers on a separate software disc. Why should that be Microsoft's responsibility?
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|What does Microsoft have to loose? Apart from the cost to Microsoft of having to bundle the software, and the enivitable support from users phoning them up and saying "My Opera crashes when..." there is also the advertising revenues that these browsers get when using the web browsers. e.g. Firefox and Google: http://news.zdnet.co.uk/...0000121,39189475,00.htm Opera will have a similar scheme going on with google and formely Yahoo, just look at the advertising on http://portal.opera.com
Microsoft supplying these alternative browsers is not only reducing their own market share, but is actually lining the pockets of the competition.
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|Good on MSoft for giving in EC the finger by doing this. We have to live with this rubbish (from Europe) every day.
Thanks!
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|I do empathise with Microsoft of this matter. Bundling a competitor’s product with yours in the interest of fairness is ludicrous. Imagine opening your multipack of Coke-a-Cola and finding that one of them is a Pepsi- that is what is being proposed here.
I believe that turning off Internet Explorer as an application is a smart move, certainly the lesser of two evils. What I do not understand is how this is allowed to continue. Opera is multi platform, but they do not appear to be targeting Apple and Safari, Novel’s SUSE and Firefox, Google’s Android with Chrome and the upcoming Chrome OS. To me, this seems like an excuse on Opera’s part to generate some free advertising and publicity for a product that would otherwise be unknown to most users.
Unfortunately, the EU is taking this seriously, and it will be no surprise to anybody if they make a crazy ruling; it would not be the first time: http://news.bbc.co.uk/1/hi/uk_politics/2066730.stm - bendy bananas, for example.
My personal preference for a web browser is Firefox. When I install a fresh copy of windows, I fire up IE and use it to download my browser of choice, just because Internet Explorer is there, does not mean that I have to use it. The first time I fire up Firefox, it asks me if I want to make it the default browser, as do other alternative browsers, and that is fine- as an individual, I choose to use it.
It is a real shame that these small companies take pot-shots at Microsoft to get a their thirty seconds of fame.
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|"Joe offers some of the best and most insightful analysis out there"
What? After Joe's spectacular faceplant in the spluttering and largely-incoherent new-independence-day article, I'm pretty suspicious of Joe's judgment, knowledge, & writing ability. Reading this article, there's more fawning towards a "brilliant" MIcrosoft, and the analysis is pretty much the same as the first dozen hits on the topic from Google News. There's a reason this guy got canned from his last handful of vendor-slobbering gigs.
(Yawn) Wake me up when you get someone worth reading.
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|Nice take on the situation. I agree that Microsoft gave a fitting reply to EU and Opera. I bet now, that EU is busy on cooking up some law which prohibits MS from freely distributing CDs with it's software....
It's sad the both EU and Opera don't understand the dynamics of the market. Market always rewards products with useful features...look at how Firefox has grown...but then you also need a department/people to sell your stuff...again, look at Opera...probably the best browser in the world. It's light years ahead of others...innovative to the extent that everybody else copies from it...but then they don't do selling for desktop well....
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|Awesome to see Joe Wilcox writing for Betanews!
Joe offers some of the best and most insightful analysis out there and unlike a great many tech journalists and analysts, he has a balanced perspective, which is presented in some of the most readable ways I've seen. Sadly, a lot of bloggers and tech analysts seem to serve their own self-interests rather than focusing on the interests of the reader. Joe shatters this trend and sets the clear standard for online tech journalism and analysis and focuses on the needs of the reader. He doesn't pander to anyone and calls them as he sees them.
Congratulations to both Joe and Betanews!
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|"balanced perspective"??
*laughing*
Hilarious.
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