Friday, May 16, 2003

Antitrust News: Microsoft

The EU is after Microsoft yet again, this time for competing head-to-head with Linux:

The European Commission is considering whether to order Microsoft to hand over internal memos revealed in the International Herald Tribune and New York Times newspapers that describe sales practices the European regulator suspects may break its antitrust rules, people close to the Commission said Thursday.

The sister newspapers reported that Microsoft's top salesman, Orlando Ayala, last July circulated a confidential memo to senior executives of the company around the world laying out a strategy to offer big discounts to governments and institutions, and in some cases to offer the company's software for free.

Ayala is reported to have told colleagues that the aim of the strategy is to dissuade clients from switching to rival PC operating system providers -- and especially to Linux, the open source software platform which is starting to steal market share from Microsoft in the server software market.

"Under NO circumstances lose to Linux," Ayala is reported to have written in the memo dated July 16, 2002.

Most discounting is viewed as normal competitive business behavior, but European Union antitrust law prohibits companies that dominate their markets from offering big discounts if their main aim is to exclude rivals, or if the discounts are only offered to certain clients. [InfoWorld]
Gee, and I though antitrust encouraged competition.

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