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Letter Charges Illegal forced sale of MS Windows, EC Says Not Likely
Below is a letter sent off to the European Commission, followed by their response, regarding the linking of Windows to hardware sales and the inability to obtain a refund from hardware manufacturers when the user does not wish to use the pre-installed Windows operating system. Dear Secretary General, Dear Ms Day, I am writing to make a formal complaint concerning the forced sale of Microsoft OS with notebooks in Belgium and other EU countries, and more specifically the failure of Belgian authorities to prevent the distortion of the market for notebook laptop computers. All major notebook computer suppliers in Belgium, perhaps representing almost 99% of the retail notebook market, offer no option other than to pay for a pre-installed version of Windows. Such companies include Dell, Packard Bell, Photo Hall, MediaMarkt, HP, Sony, Toshiba, Acer, Fujitsu Siemens, and Lenovo. The forced pre-installing of and payment for Microsoft operating systems on notebooks in Belgium has engendered a distorted market. The companies involved maintain confidential pricing policies as to manufacturer-paid charges for the Windows operating systems. However, there are indications that this could lead to excess charges of EUR 100 for unit purchased by an end consumer. As a user of an alternative operating system based upon a GNU General Public License, as do some 5 percent of notebook users, I myself now face being charged for a product I do not and will not need. Although the End User License Agreement (EULA) for the Microsoft Windows XP Professional and Microsoft Windows XP Home Edition refers in vague terms to the possibility of a refund in the event of not installing and not agreeing with the EULA terms, notebook providers in Belgium refuse to offer such refunds and do not have known procedures for so doing. As a normal customer buying a single notebook, it is not possible in any way to configure purchase options so as NOT to pay for a Windows operating system at any of the following retailers: Dell, Packard Bell, Photo Hall, MediaMarkt, HP, Sony, Toshiba, Acer, Fujitsu Siemens, and Lenovo. I therefore request that the Commission make a formal investigation into the distortion of notebook computer market in Belgium and elsewhere as well as to force local authorities to ensure that consumers have the right to choose whether or not to buy a Windows operating system when purchasing a notebook in Belgium and elsewhere within the EU.
The EC's ResponseDear Mr. Ferguson,
The Commission is aware of the difficulties encountered by consumers to purchase PCs without an operating system on them or alternatively with another operating system than Windows. As regards the possibility of purchasing a PC without an operating system, I understand that Microsoft's licensing agreements with PC manufacturers encourage (through the grant of rebates) the pre-installation of operating systems on PCs. However, this does not have to be a Microsoft operating system. The Commission is not aware of any obligation either contractual or financial, obliging the PC OEMs to sell their PCs with Windows operating systems in particular. Furthermore, it appears that the choice of a PC vendor to offer PC with or without an OS is not so much influenced by the rebate offered by Microsoft than by the existence of effective consumer demand for PCs with operating systems. We suspect that the structure of the market and demand from consumers is the driving force behind the decision by PC vendors to offer Windows preinstalled on the majority of their computers. If this is information is confirmed, the conduct of PC manufacturers would be justified by pure commercial reasons and may not fall under the provisions of EC competition law. That said we have not yet finalized our review of the market and are grateful that you took time to inform us of the problems you have encountered. Against this background, I would like to take this opportunity to inform you that the Commision intends to examine these questions in greater detail in the future. Yours sincerely, Angel TRADACETE COCERA EUROPEAN COMMISSION DG Competition Director Directorate C: Information, Communication and Media B-1049 Brussels
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Comments (15)
umm.. o.k....
That said we have not yet finalized our review of the market and are grateful that you took time to inform us of the problems you have encountered. Against this background, I would like to take this opportunity to inform you that the Commision intends to examine these questions in greater detail in the future.
Quoting:I would like to take this opportunity to inform you that the Commission intends to examine these questions in greater detail in the future.
They said without actually committing themselves to anything, like a date.
If Microsoft have, as we plainly know they have, manipulated the market so that the common perception is that there is no alternative, then it follows that Windows is the only choice.
A choice of one is not a choice, unless your name is Hobson.
(The origin of the term Hobson's choice is said to be in the name of one Thomas Hobson (ca. 1544-1631), at Cambridge, England, who kept a livery stable and required every customer to take either the horse nearest the stable door or none at all).
It maybe necessary to have a "show up at the EC with laptops running Linux day" to show them that Windows is not the only choice.
A couple of celebrities on our side would help. Though is grieves me to say it.
The bottom line is that a few Linux users versus the grief that Microsoft would cause if provoked over this makes the outcome more or less a given.
Sounds like MS to me...
My Response
My response would be this: It is a subject of debate whether the market made the monopoly or the monopoly made the market. It is not a matter of debate whether Europe (or the US for that matter) ought to enforce their laws against illegal product tying.
For my part I've been ripped off several times and would like to get a razor blade and scrape off the ugly holographic graffiti that adorns my computers.
The question is not whether the laws should be enforced, but whether the laws are being broken.
If there is no requirement placed on PC makers to sell their machines with Windows, it is hard to establish illegal product tying. What product is being illegally tied to the sale of the PCs? For that matter, who is the guilty party?
Can it possibly be the PC makers, who nobody accuses of holding a monopoly?
Can it be Microsoft, who does not require that it's product be installed?
So...
What is the illegal act?
How is it being perpetrated?
and, by whom?
The OEMs are the obvious guilty ones, since they don't offer a refund, though they are probably forced to do so by Microsoft. I found out, it finally is (can be) Microsoft who ends up paying the refund. Therefore, the OEMs don't take any risk by installing Windows, if there was a refund at all, Microsoft would pay.
The European Competition law also knows misuse of a monopoly position, and that position is probably being misused by Microsoft, but that's too difficult to prove. Nonetheless, it seems even unwritten agreement is illegal according to term 81 of the Treaty of Amsterdam.
I think you have run into a limitation of any law.
To every law there is letter and spirit. One hopes to see the spirit of the law obeyed, but law is a rather blunt instrument. Meeting the letter generally suffices, if for no other reason than making it difficult to establish a violation of the spirit.
http://www.linuxcabal.com/articles/MSRefundDay19990215.html
http://linuxmafia.com/refund/coverage.html
[Edit] And one more: http://www.svlug.org/events/refund/
Quoting:To every law there is letter and spirit.
There's a court to judge about that. Luckily, it only takes them ten years (avarage) to decide about the spirit.
Quoting:Why would they start now?
Times have changed. Only the EC can make them start, since MS is afraid of the EC today (I think). Therefore, the EC should be convinced the OEMs break the law by not offering a refund. I'll try to take care of that 'convincing' ASAP (holidays start in ten days). I'm planning an official complaint, and some media attention (at least, I hope).
I know European law is somewhat different from American, but...
I still have trouble seeing how the OEMs are breaking any law.
You can complain about your EU Member State not protecting you as a consumer and not complying with EU rules about competition or not protecting you from illegal trading practices:
You need to write to the Secretary General of the European Commission, Catherine Day at:
SG-PLAINTES@cec.eu.int
Have no time to search for the references but EC and US law are fairly similar. You can't force someone 'illegally' to buy one product that is not necessarily related to another. That means if you come to my chain of shops to buy soap, and automatically have to buy monopoly shampoo, then that is illegal forced sale (tied sale in the US).
This is the European Commission decisin of 24.03.2004 relating to a proceeding under Article 82 of the EC Treaty (Case COMP/C-3/37.792 Microsoft)
http://www.worldlii.org/eu/cases/ECComm/2004/12.html
[1219] The Court of Justice has also held that even if tied sales of two products are in accordance with commercial usage, such sales, if entered into by a dominant company, may constitute abuse within the meaning of Article 82 unless they are objectively justified.[1220] In a competitive environment, market forces attenuate the scope of the deterrent effect on innovation of the tying of separate software with an operating system. While a non-dominant client PC operating system producer who chooses to integrate may control innovation relating to the features on its platform, competitive innovation in the market is still possible because new features may be developed in conjunction with competing platforms. This is not the case where the platform market is virtually monopolised. Tying will deter innovation in the whole market to which the integrated product belongs.
In the United States, illegal tying requires some kind of market power.
The question is whether the OEM's have it.
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everyone who believes a vendor would dare to install a non-m$ operating system after accepting microsofts' "rebates" please stand up...
anyone... bueller?