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Institute urges the EU to unbundle Windows

Gobblers loosed
Mon Sep 24 2007, 11:25

A THINK TANK in Europe called The Globalisation Institute has recommended that the EU Commission require the unbundling of Microsoft Windows from new computers to promote competition in the Operating System (OS) software market.

Noting in a policy briefing the EU Commission's recent antitrust victory in the European Court of First Instance, which in part directed Microsoft to unbundle its Media Player product from the Windows OS, the Globalisation Institute says:

"Examining a more central issue -- the lack of choice in desktop operating systems -- is now needed if the Commission is to encourage a marketplace in which [the] vision of thriving competition is enacted. This briefing argues for the Commission's thinking on Microsoft's operating system monopoly to go to its logical conclusion and support the "unbundling" of Windows from desktop computers."

Bundling refers to the common practice of computer manufacturers to include the OS software with computer hardware, all for a single price and typically without the buyer having any choice as to what OS software they receive. Unbundling means the decoupling of computer hardware and software such that each is sold and priced separately, often with the buyer having a choice between two or more competing OS software products.

Bundling of computer software products with hardware systems has been prohibited for vendors of expensive, large scale commercial computer systems such as mainframes and high-end Unix systems for about 25 years or so.

The briefing continues by observing that healthy competition already exists for commodity computer hardware components -- Intel versus AMD chips, different vendors' hard drives, competing video cards, and so on -- but does not exist in the OS market because of the Windows monopoly. It says:

"Yet operating systems are not a natural monopoly. Just as evolving standards in hardware allow a combination of competition and compatibility, in a competitive operating system market, there would be broad compatibility between different competitors' operating systems."

It argues that Microsoft Windows imposes higher costs on European businesses, saying: "The Windows monopoly imposes an extra cost on virtually every EU business, as the price of operating systems would drop in a more competitive market." It concludes:

"This paper's recommendation is that the European Commission should require all desktop and laptop computers sold within the EU to be sold without operation systems. ... Unbundling would foster a competitive market, increase consumer choice and reduce prices."

Hear, hear. µ

Globalisation Institute (pdf)


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