Cybersource takes Microsoft Monopoly to the Australian Competition and Consumer Commission
Jul 28th, 15:12 UTC
Microsoft's anti-competitive tactics are hurting Australian consumers to the tune of $200 million every year. In their efforts to tilt the playing field against more price-effective competitors, Microsoft's monopoly costs consumers, reduces freedom of choice, undermines viable competitors such as desktop Linux and hurts Australia's already shaky
balance of trade.
Cybersource has outlined the problem in a whitepaper titled 'The Cost of Software Monopoly: How Australian Consumers Lose'[1]. Cybersource is calling on the ACCC (Australian Competition and Consumer Commission) to level this playing field and allow competitors like ourselves to compete against Microsoft on our merits.
"Our research has shown that the PC hardware market shows real
competition, but in the PC operating system and office productivity areas, where Microsoft wields a monopoly -- and was found guilty of abusing that monopoly -- innovation and price-performance has suffered," said Cybersource CEO Con Zymaris. "In fact, the competitive hardware space has shown a 100-fold improvement in price-performance compared to the software marketplace where Microsoft wields dominance."
"Australian consumers have suffered because of this lack of competition in the desktop market. In fact, over $1 billion has been sucked out of Australian consumer's pockets just these past 5 years alone. The vendor deals that Microsoft has enacted are strangling competition and blocking the progress of viable alternatives like Linux. If that's not harming consumers in the PC market in Australia, then what is?" continued Zymaris.
The investigation reveals the following Key Points:
1) It is near-impossible (or extremely difficult) for consumers to purchase a desktop PC or laptop from a tier-1 or tier-2 computer manufacturer without also having to purchase an OEM copy of Microsoft Windows operating system platform.
2) The computer market is in many ways similar to the telecommunications market. When one vendor has over 95% of the market, that vendor should be bound by a universal service obligation to ensure that all consumers can access the content, documents and data which reside on that vendor's platform. Neglecting such an obligation hinders all consumers and third-party developers not using that vendor's monopoly platform, further increasing anti-competitive pressures.
Cybersource seeks the following Remedies:
1) The first remedy that Cybersource seeks from the ACCC is that all tier-1 and tier-2 vendors should be required to offer their desktop and laptop products without an operating system pre-installed, that this choice (and corresponding price reduction) be presented to consumers as broadly as the products themselves are, and that the price difference between the with- and without- operating system options should also be clearly and broadly presented at retail outlets, on vendor marketing literature and vendor websites.
2) The second remedy that Cybersource seeks from the ACCC is that Microsoft should be required to offer unfettered and unencumbered access to all major content, document, data and applications formats which could enable interchange and interoperability between users of its platform and users of other alternative platforms.
"It has been established as fact[2] that Microsoft has a long history of bullying PC vendors who have dared to introduce alternatives to Microsoft on the desktop," continued Zymaris. "We don't know if the PC vendors' hands are tied by invisible shackles orchestrated by Microsoft. However, having the ACCC ensure that the 'no operating system' option is made available is the only way of finding out - the vendors have always been too scared to act on their own against Microsoft."
"How do we know that this move will encourage competition? In areas where vendors do not pre-install a Microsoft operating system, for example the server market, Linux has gained around 30% of the market and has led to an increasingly fierce and competitive battle, as should be the case. We want the same battle to occur on the desktop. This can only benefit the consumer, through better products at lower prices,"
concluded Zymaris.
References:
[1] http://www.cybersource.com.au/about/monopoly.html
[2] http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm
(Submitted by Con Zymaris of Cybersource Pty. Ltd.)
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