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The Problem: Setting up a business and securing long term business survival - can it be planned?

The EU decision is likely to be contested strongly in the law courts. © Photolibrary Group

Microsoft's Windows operating system: anti-competitive or customer convenience personified? Image copyright: Sam, from stock.xchng.

This month marks the latest round in the long-running saga of Europe versus Microsoft. In March 2004, after a lengthy investigation, the EU levied a fine of nearly £350 million on the software firm and also ordered that it release details about its code to its rivals, accusing it of anti-competitive behaviour. The ruling follows a similar one in the United States in 2001. Microsoft has a market share of around 90% in the operating systems (OS) market. It ships the OS plus a bundle of other software items, including Windows Media Player, Internet Explorer and Outlook Express, the e-mail software. This so-called 'bundling' is at the heart of the debate. The EU has argued that such a strategy restricts competition, in that smaller software manufacturers face difficulties accessing the market in the face of the dominant position held by Microsoft.

Microsoft, for its part, has argued that there is plenty of competition out there and Microsoft is not preventing anyone from downloading any other type of software if they so choose. It believes that providing these additional software items simply makes it less of a bind for customers who do not wish to go through the hassle of downloading additional software. Microsoft is also very unhappy at the order to release details of its code and claims that such a move would affect firms who are innovative and creative.

The outcome of the appeal by Microsoft could have important consequences for the regulation of competition not only in Europe but elsewhere, so businesses and the authorities are watching the outcome with interest.