Windows Reduced Media Edition Redux?

by on January 20, 2009 · 7 comments

The European Commission may order Microsoft to strip Internet Explorer from certain versions of Windows, according to a preliminary ruling against Microsoft stemming from a complaint brought by Opera. Opera claims that Microsoft is “abusing its dominant position” by bundling IE with Windows, and consequently denying consumers “genuine choice” among web browsers.

If the European Commission upholds Opera’s complaint against Microsoft, it wouldn’t be the first time Microsoft has been found guilty of antitrust violations stemming from applications bundled with Windows.

Back in 2004, the Commission ruled that it was illegal for Microsoft to bundle its Windows Media Player with Windows and ordered Microsoft to offer a Media Player-less version of the operating system. Microsoft responded by unveiling the wryly named “Windows XP Reduced Media Edition.” Unsurprisingly, the European Commission rejected the name, so Microsoft renamed the OS “Windows N.”

Despite Windows N’s fairly neutral-sounding name, consumers showed little interest in Windows N when it hit the shelves. It’s quite obvious why Windows N was a flop–why would anybody want to run an operating system lacking useful components, especially when plenty of alternatives are available online at the click of a button?

The same reasoning is sure to relegate a browserless Windows (Windows: Reduced Internet Edition, perhaps?) to commercial irrelevance. Such a product would be placed on shelves solely to satisfy regulators convinced that they’re somehow “protecting” consumers by ensuring inferior products can be had.

How would the average user even select a preferred browser in the first place without a pre-installed browser? While OEMs could always pre-install a browser, anyone who wanted to install (or reinstall) a browserless version of Windows from scratch would need to jump through hoops just to get online.

More to the point, Opera’s claim against Microsoft looks downright absurd given the reality of today’s increasingly competitive browser marketplace. Despite IE being bundled with Windows, Firefox has gained significant ground on IE in recent years. Four years ago, IE had 91% global market share, while Firefox hovered around 3.5%. Now, Firefox is almost at 21% market share, and IE recently dropped below 70%.

Firefox’s ascent did not happen because of a mass exodus of users from Windows to other operating systems. To be sure, Windows has faltered a bit as of late, but Firefox has gained the following of a massive number of Windows users who elected to download and install Firefox as a replacement for Internet Explorer. This illustrates that users are perfectly willing to pick their favorite application for a given task, even if that means downloading a third-party app on the Internet. Plenty of other programs, like VLC and Google Desktop, have taken off among Windows users even though these apps largely duplicate the functionality of bundled Windows components.

Where does all this leave Opera? Unlike Firefox, Opera is still a laggard in terms of market share. Blaming Opera’s inability to gain a large user base on the bundling of IE with Windows, however, is entirely misplaced. The folks at Opera may feel that going after Microsoft might help them peel off a few users-or, at least, get Opera’s name out there in the press-but Opera’s biggest enemy is certainly not Internet Explorer.

  • http://www.cs.princeton.edu/~tblee Tim Lee

    Great post Ryan.

  • DB

    I think your prediction gives these regulators too little credit. They almost certainly learned from their last experience, and will adjust remedies accordingly. For instance, I doubt it will be sufficient to merely offer a version of Windows lacking IE–they will likely be required to strip IE from all versions of Windows sold in the EU. Alternatively, they will exercise their ability to set prices, and ensure that Windows -IE sells for a deep discount over traditional Windows.

  • Ryan Radia

    Good point. It wouldn't be surprising if the EC were to order MS to unbundle IE entirely or, alternatively, sell a browserless version at a steep discount. Forcing MS to strip IE from Windows would be quite the spectacle. Leave it to regulators to order a company to reduce the functionality of its products in the name of consumer welfare.

    I also wonder how the EC would figure out how much to force MS to discount a browserless version of WIndows, given that IE has always been free. If MS were to price a version of Windows without IE lower than the regular version, then users would simply purchase the cheaper version and then acquire IE for free.

  • MikeRT

    This just sounds like sour grapes from Opera. Their browser, despite being a good product, really has no future in the mainstream desktop market. Even Google Chrome will probably exceed its marketshare among desktop users within a year.

  • mwendy

    I think the EC is having a Lindsay Lohan moment – you know, she doesn't produce any good movies any longer, so she has a “rehab incident”, or a trip-and-fall to get her back on the cover of People, US and Star Magazines. Kind of pathological in a certain sense.

    The T3 complaint against IBM should at the EC should thus be realized using similar reasoning.

  • mwendy

    I think the EC is having a Lindsay Lohan moment – you know, she doesn't produce any good movies any longer, so she has a “rehab incident”, or a trip-and-fall to get her back on the cover of People, US and Star Magazines. Kind of pathological in a certain sense.

    The T3 complaint against IBM should at the EC should thus be realized using similar reasoning.

  • mwendy

    I think the EC is having a Lindsay Lohan moment – you know, she doesn't produce any good movies any longer, so she has a “rehab incident”, or a trip-and-fall to get her back on the cover of People, US and Star Magazines. Kind of pathological in a certain sense.

    The T3 complaint against IBM should at the EC should thus be realized using similar reasoning.

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