^{Democracy & Technology Blog} EU Treating Microsoft like a Utility

Microsoft has been warned by Commissioner Neelie Kroes of the European Union that there are some features it should not bundle into its new operating system (see, e.g., “European regulator warns Microsoft about new operating system“ from European Business News Online). The EU’s competition directorate has already decided that competition could be costly and involve risk for Microsoft’s competitors. Yes, it sounds ridiculous — but essentially that’s what it is. Kroes’ warning may indicate that Microsoft is losing its freedom to innovate and in effect will now be required to obtain preapproval from the EU for any new product design. If so, the EU could be doing to Microsoft what the FCC did to the Regional Bell Operating Companies by forcing them to share every element of their business. Commenting on the folly of the FCC’s grand strategy to achieve a state of perfect competitive equilibrium in telecom, Justice Breyer noted that forcing firms to share every resource creates “not competition, but pervasive regulation.”