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July 27, 2005

Australia's generous support for Microsoft

There are some interesting figures in the white paper Melbourne-based open source solutions provider Cybersource has submitted to the ACCC as part of its call for action against what it describes [you're not going to hear any objection from Bleeding Edge] as a Microsoft monopoly.

Cybersource has told the competition regulator Australian consumers and industry are paying at least $200 million per year in artificially inflated prices, because of Micoroft's market dominance.

Cybersource says that while the price of the average desktop PC has fallen from $4000 to $800 since 1994, the cost of Microsoft's Windows and Office software - which holds a 95 per cent market-share stranglehold - has doubled, with "no serious functional feature improvement for most consumers".

It says that over the same period, the percentage cost of hardware in the average PC had fallen from 85 per cent to 35 per cent, while the cost of the Microsoft software had risen from 15 per cent to 65 per cent - by far the lion's share of the whole system.

At the same time, in what it describes as a tell-tale sign of an anti-competitive market, the actual production and distribution cost for Microsoft had plummeted, with the elimination of large numbers of floppy disks and printed manuals by one or two CDs.

Consumers, it says, have been given no choice. If they want to buy the hardware, they must also buy Microsoft software. The situation has led to operating margins of between 79 and 84 per cent for Microsoft, compared to between 4 and 10 per cent for hardware vendors like Dell and HP.

Cybersource wants the ACCC to require major vendors to offer their desktop and laptop products without any pre-installed operating system, and to inform customers of the price differences.

It also wants a requirement for Microsoft 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".

Here's a question we'd like to ask: If US and European and Japanese regulators have already moved against Microsoft's anti-competitive conduct, how come the ACCC hasn't lifted a finger?

Posted by cw at July 27, 2005 11:01 AM

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(a) WTF on the above comment

Question: How come the ACCC hasn't lifted a finger?
Ansswer: Because we lost Allen Fels, the only friend we consumers really had. I mean, it's not like lil' Johnny's gonna lift a finger when he's been sitting on the Telstra timebomb for years.

Posted by: Aragond at August 4, 2005 12:21 AM