|
|||
Suppose that Microsoft negotiates a settlement on its existing antitrust suit in the US, in such a way as to avoid a breakup. (I think this likely.) Suppose further that the EU then orders a breakup. It seems to me that in that case Microsoft faces one of two choices: either accept the breakup order or cease to do business in the EU. I really suspect that the latter is the course it would take. Microsoft would change its license agreements to forbid direct or indirect sale of its products into any country which is part of the EU, and by so doing it would cease to be subject to EU antitrust regulation and the breakup order would be null and void. (Dell and Compaq would take it in the teeth, but that's "collateral damage.") This would represent a considerable decline in sales for Microsoft (about 15%), but this would also turn out to be temporary. This would hurt the EU a lot more than it would hurt Microsoft. PCs are no longer a luxury in the industrialized world, and without the ability to buy them, any industrialized country will be in deep trouble quite soon. And I don't just mean "desktop computers" being vital, I specifically mean x86's running Microsoft operating systems and/or Microsoft applications. Apple would certainly step in to try to fill the void but it couldn't really do so, and Linux and BSD can't either. The reason is Office; Linux and BSD don't have it (and for most users "Star Office is just as good" doesn't play, and Linux and BSD aren't ready for prime-time on the desktop yet anyway), and while the Mac does support Office, Microsoft would forbid sales of Office for Mac to the EU, making it impossible for Apple to fill the void. The resulting dent might well kick the entire EU into recession. The EU could not order Microsoft to return to selling its products to the EU, because once Microsoft ceased to do so the EU would no longer have the power to order Microsoft to do anything. I think that the standoff would last no more than one year, and then the EU would relent, and beg Microsoft to stop what amounted to a boycott. At which point Microsoft would also negotiate an agreement with the EU that also did not include a breakup. Total cost to Microsoft would be on the order of $6 billion in revenue, perhaps $2 billion in lost profits, which would be cheap at the price for a company with more than $50 billion in cash and investments. It is interesting that we actually have a company which is sufficiently powerful that it has the ability to engage in a trade war with fifteen nations with decent chance of winning. (discuss) |
|||
