Virtually everyone agrees that Microsoft Vista is a shoddy, half-baked piece of software that is extremely unpleasant to use. Stories of people downgrading back to Windows XP are legion. Yet Microsoft has made more money from this version of the operating system than any of the preceding ones. The fact that a company has achieved such monopolistic dominance that it can just rake in wads of money without regard to the quality of its product is astonishing. Even the most ardent free-marketeer acknowledges that monopolies are bad things; that they damage the public weal; and that government intervention is required to mitigate that damage. But what intervention have we seen to deal with the Microsoft monopoly?
None that is effective. The US anti-monopoly action died with the Clinton administration. Many American politicians are happy that an American company has achieved such dominance in the global IT sphere. They don't want to do anything to tamper with that. Apart from the tide of revenue it brings into their country, they most likely extract numerous other advantages from this arrangement. It is virtually certain that some of the top American software firms, including Microsoft, insert backdoors, like the notorious NSA key, into their software to make it easy for American spy agencies to get whatever they want from a computer belonging to one of their victims. Certainly, if you read accounts of how various terrorists are apprehended, and information extracted from their hard drives (despite being encrypted), it's curious how unchallenging that process always seems to be for the Americans. There are cases where the terrorists have employed the best readily available encryption techniques on their machines and yet that encryption is apparently penetrated with ease. This is the kind of encryption that we are told it would take a trillion supercomputers a thousand years to break and the like. Yet it never does. So what are the possible interpretations? The claims about the quality of this encryption are overblown, the terrorists have applied it incompetently, or the Americans have a backdoor that allows them to bypass it.
So we can expect no effective action from the Americans since they are happy that the monopoly is their monopoly and that the rest of the world is effectively forced to pay a monopoly tax to this incompetent American company. What have we seen from Europe? Nothing but Mickey Mouse fines and trivial actions like forcing Microsoft to separate the OS from the browser. This isn't good enough. We need the kind of action that is likely to bring the monopoly to an end over the medium term. To achieve this, I would suggest the following for consideration:
- Ban or massively restrict special pricing arrangements, whereby Microsoft supplies its Windows software at differential prices to various other companies - in return, of course, for them obliging Microsoft in some way, such as refusing to sell computers with alternative operating systems. There should be a retail price and a wholesale price - available to all.
- Force retailers or computer manufacturers to sell every model with at least two operating systems, or with no operating system.
- Pass laws exposing Microsoft to legal and commercial consequences for the failings of its software. These would invalidate the vast sets of terms and conditions which Microsoft supplies with all of its products, the effect of which is to insulate Microsoft from the consequences of its own actions.
- Create a new open-source operating system, paid for by the EU taxpayer. This would probably be a version of Linux.
- Force Microsoft to release the source code for any version of the Windows operating system it sells in Europe and allow other companies to license that code base and use it to create and sell their own versions of Windows. Microsoft will receive a generous amount of the selling price of any new version of the operating system, allowing it to benefit from the investments it has made over time, but its monopoly would effectively be ended. Other companies would then be selling Windows versions too. And, without question, competent software companies would quickly find ways of making Windows much more user-friendly.