Microsoft admits power of bundling

Last updated on January 31st, 2015

Back in 2003, when the EU questioned Microsoft’s bundling of Windows Media Player (WMP), Microsoft claimed that competing products could easily be downloaded, so why was it so unfair to bundle WMP?

Now that the EU has proposed a solution where WMP should not be bundled with Windows, Microsoft has complained that removing it from its operating system would be detrimental, causing users to suffer.

Why should this be? After all, as Microsoft suggested, what’s wrong with downloading a media player?

Microsoft is fully aware of the benefits bundling provides; having this opportunity taken away is obviously a painful blow. Concerning its own products, Microsoft argues that bundling doesn’t do any harm to the competition, and that it isn’t doing anything wrong; yet, when the question of shipping competing products with Windows arises, Microsoft is opposed to giving its competition what has been referred to as a ‘free ride’.

Microsoft isn’t always opposed to supporting competing products. Take Java for example. Java is a programming language designed so that a compiled program can run on any operating system (OS) supporting the Java Runtime Environment (JRE).

Back when Java first became popular, the majority of developers were writing software purely for Windows, as this was the dominant OS for home and business use. There was little reason to suffer the hassle of tweaking code so that it would run on any alternative OS (which was required when using other programming languages). Java’s platform-independent nature eliminated this hassle: the same code could run on any OS. This was a major threat to the dominance of Windows.

What pushed the popularity of Java was the Web browser, allowing programs to run within Web pages. The JRE was first supported in this way by Netscape, which was the leading browser at that time. Microsoft, unwilling to be left behind, also supported Java in Internet Explorer (IE). Being determined to win the browser war, and unwilling to compete, Microsoft took another desperate step and bundled IE as a free product with Windows, passing by the opportunity of making money out of the growing browser market.

Still, it could be considered odd that Microsoft decided to bundle a JRE with Windows, giving a helping hand to the competition. Not so. Microsoft didn’t ship Sun’s JRE, it shipped its own doctored version. With Windows’ dominance, this polluted version became standard over the original, proving a very effective hindrance to Sun, and preventing Java from becoming the platform-independent solution it was intended to be. Microsoft also started development on .Net, which was a direct competitor to Java.

Quite fitting for the moment, and at a time where Microsoft had been shamed by a constant flow of security issues, a further embarrassment came when its ‘polluted’ JRE was found to be full of security holes — an issue that didn’t affect Sun’s JRE. This in itself emphasized the changes that Microsoft had made to it.

Sun filed an antitrust lawsuit against Microsoft in 2002, complaining that Microsoft undermined the success of Java. The company requested that Microsoft remove its polluted JRE from Windows; but why should Microsoft be concerned? Netscape was conquered at this point, there was no competition to give reason for shipping a JRE, and Microsoft had .Net. As Microsoft’s JRE became standard, Microsoft’s lack of JRE could just as easily become standard — IE most obviously had the power to set the standards. So, Microsoft promptly announced that no JRE was to be shipped with Windows.

Sun’s next move was to demand that its own JRE should ship with Windows. Although Microsoft had happily shipped its own doctored JRE beforehand, there was vehement opposition to the idea of shipping the pure product. Why? What was the difference? It had supported Java before, why not continue what it had been doing? Obviously there was no benefit to Microsoft.

Microsoft attorney David Tulchin said that “The antitrust laws were not promulgated so that one competitor could take a free ride on the back of another competitor,”. This was admitting that distribution and marketing of a product was no easy task, and that bundling with Windows got the product immediately to all Windows users.

Tulchin made a statement that there was no immediate prospect of irreparable harm to Sun that would justify forcing Microsoft to carry Java.

This brings me to my main point: if Tulchin was right, why is Microsoft acting as if there is an immediate prospect of irreparable harm to Microsoft that would justify forcing it to carry Windows Media Player? If there was no harm to Sun, a company without a monopoly, surely there is less harm to Microsoft — having both a monopoly and a successful media player? Or is this a case where Microsoft is forced to admit the power of bundling?