Double Standards

Microsoft seems to have a double standard on standards. In  acquiring online videoconferencing leader Skype last year, Microsoft refused to commit to standards-based interoperability between Skype and other video communication products. The US and the EU gave their ok for this deal as-is, thereby enabling proliferation of a proprietary Skype platform with the market reach and resources of Microsoft behind it. Their belief was that consumers would still have plenty of other VoIP choices, so this was not an anti-competitive situation.

Consumer choice of a platform is not necessarily the issue, but I don’t think regulators understand this. Like with the telphone, one way calls don’t work. People will choose different vendors’ platforms, and those should be able to talk to each other.

Yesterday, networking giant Cisco, a major player in the Video and VoIP business, filed an appeal with the General Court of the European Union asking for a review of the EU’s approval of Microsoft’s Skype acquisition. The basis for the objection is not the merger itself, but Microsoft’s refusal to embrace standards-based interoperability between Skype and other video communications products.  Cisco’s stated goal is to “ensure broader customer choice, greater competition…and to help foster an environment in which video calling is as easy and seamless as a voice call or an email is today.”

Microsoft has a history of trying to monopolize markets, and I would have thought they would have learned from the Internet Explorer anti-trust bruhah with the EU that incurred years of costly litigation and huge fines. But the current Skype issue is all the more audacious, considering that when Cisco acquired Swedish video company Tandberg in 2010, Microsoft lobbied the European Commission for the same kind of  standards based interoperability commitments, to which Cisco agreed. Now in the opposite position, Microsoft isn’t interested in playing fair, and it would seem isn’t confident enough in its ability to deliver the product of consumer choice, so that it is dug in to a protectionist stance.

It puzzles me that in this internet era, companies think they can still lock up proprietary markets. Skype is a popular platform, but VoIP video conferencing is still nascent. As adoption grows, I believe consumer demands will force the need for openness, as is happening in so many other online applications. While the EU is the target of this week’s action, the US is certainly as complicit in approving the deal last year. That legislators still don’t get the recurring pattern of what happens with ICT lets me know there’s a long way to go with making sense of technology and policy.

1 Response to “Double Standards”

  1. 1 Dave DuRant
    February 17, 2012 at 11:28 am

    Monopolizing markets is a time honored tradition of American capitalism. Companies try to get away with it and it’s up to the consumer or the government to stop them. When it comes to profits, fairness doesn’t enter into the equation.

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