Integration and Bundling in the Microsoft Antitrust Trials

Friday, 2003-12-19; 02:03:00

Why Apple's integration is allowed, and Microsoft's isn't.

(Originally posted on AppleXnet)

RealNetworks' lawsuit against Microsoft alleging that Microsoft illegally used it's market dominance to push Real out of the digital media market has sparked a wide range of reactions. As Apple itself has been relegated to single-digit market share because of Microsoft's licensing of Windows early in computer history, Microsoft's market dominance is a sore spot for many Mac users. So it's no surprise that Real's lawsuit is big news in the Mac community, and has sparked heated debate as to whether Real or Microsoft will win this battle in the next stage of Microsoft's antitrust woes. Of course, with the first antitrust trial against Microsoft over, Real has a large court case to use as precedent when proceeding with its litigation. It's safe to say that this antitrust trial will probably be almost as important as the first.

But there seems to be some confusion among some people about the core issue in the trial against Microsoft: integration. The main question centers on why Microsoft isn't allowed to integrate its media player or web browser without fear of litigation, and why it's forced to provide a way for computer manufacturers to remove Microsoft's bundled applications.

First off, it needs to be pointed out that Apple does indeed do what Microsoft does: Apple bundles applications with the operating system, it integrates its web browser and media player into the operating system, and the operating system would not be able to function correctly without it.

The bundling issue is obvious: the whole iLife suite, with the exception of iDVD, are all included as a standard install with Mac OS X. Apple also includes a bunch of other bundled applications that are not necessary for an operating system: a mail client (Mail), a font management application (Font Book), a scanner and image downloading utility (Image Capture), an instant messaging client (iChat), and many other applications. For some of these applications, Apple forces you to install them, even though you can easily delete them without ill effects later. But in addition to bundling, Apple integrates some of its technologies into the operating system as well.

QuickTime, Apple's media player, is tightly integrated into Mac OS X. The QuickTime framework does most of the heavy lifting when it comes to displaying images and playing sounds and movies, while the QuickTime Player application is just a graphical interface to accessing the QuickTime framework. Finder previews use QuickTime to render images and movies directly in the Finder window. Preview uses QuickTime to display pictures. The alert sounds that you hear coming from your Mac are all processed by QuickTime. iTunes uses QuickTime to play all the music files that are in your library (which is why you need QuickTime 6.2 or later to play AAC files through iTunes). These examples show how pervasive QuickTime is in Mac OS X.

Safari, on the other hand, only recently achieved integration into Mac OS X with Panther -- but it has still become integrated. Mail, the built in e-mail client, uses Safari's rendering engine (called WebKit) to display complex HTML e-mails. Help Viewer, which is opened whenever you press Command-?, also uses WebKit to display the HTML help files that come with most applications. It's likely that TextEdit in Panther uses WebKit to display HTML files when that option is enabled. Without WebKit, on which Safari is based, many applications in Panther would cease to function. In Jaguar, all of these applications had their own HTML renderer, so if you hadn't installed Safari, there wouldn't be any problem.

Deleting the applications Safari and QuickTime Player is far different from removing QuickTime and WebKit entirely from Mac OS X. Safari and QuickTime Player are simply the main applications that use the frameworks to display the relevant files. You can delete them if you want, and Mac OS X won't complain. But if you delete the actual QuickTime or WebKit frameworks (located at /System/Library/Frameworks/QuickTime.framework and /System/Library/Frameworks/WebKit.framework ), all of the applications that are based on these two frameworks will cease to function. In fact, when I renamed the QuickTime framework (so that Mac OS X wouldn't know where to access it), the Finder, Mail, QuickTime Player, Preview, iChat, iTunes, iPhoto, and iMovie simply bounced once in the Dock and didn't open. Applications that aren't based on QuickTime, like iSync, Terminal, TextEdit, and Safari, all worked normally. A Mac is quite unusable in this state, so it's pretty safe to say that QuickTime is well integrated into Mac OS X.

Doing the same thing with the WebKit framework yields much more usable results. The Finder, probably the most important Mac OS X application, is able to boot without the WebKit framework under Panther. Still, many applications refuse to launch simply because WebKit is not present: Mail, Help Viewer, Safari, and even a few third-party applications like NetNewsWire Lite and Acquisition. This is because Mac OS X applications are built so that they silently fail when they don't find a needed framework. Again, it's clear that Safari is well-integrated into Mac OS X, and will only get more integrated now that WebKit is a standard framework included with Panther.

Of course, bundling and integration aren't inherently bad. The WebKit framework has been a boon for Mac OS X developers, because now they have a reliable, standards-based HTML renderer, which allows them to concentrate more on developing the innovative part of their products, rather than reinventing the wheel. Bundling, similarly, is a boon for regular consumers: they don't have to go out on the internet and find programs for doing many of the things that they want to do with a computer.

So the question is: why isn't Microsoft allowed to do what Apple does? Is Microsoft not allowed to integrate and bundle its applications into Windows simply because it's a monopoly? Would Apple suddenly be forced into de-integrating QuickTime and Safari and not bundling other apps if it gained a 90% marketshare? Not quite.

While being a monopoly is one part of the equation, it doesn't account entirely for why Microsoft is being regulated. Being a monopoly in itself isn't a crime: in fact, the government supports total monopolies in certain markets. For example, in California, CalTrans is given complete control over the maintenance of roads, and PG&E was given control over all of the power resources in California until the recent deregulation. Government-sponsored monopolies are usually granted in regards to public services, like roads and power, but that doesn't necessarily mean that monopolies aren't immediately broken up in other market sectors.

The key to the litigation is that Microsoft abused its position as a monopoly. Under contractual obligation, Microsoft stipulated that Windows licensees could not remove Internet Explorer from Windows when shipping the operating system. Microsoft threatened to cancel Microsoft Office for Mac if Apple didn't make Internet Explorer the default browser on the Mac. Even with Windows XP, Microsoft is forcing users to use Internet Explorer, its own internet browser, in certain situations regardless of the default web browser setting. Microsoft used the fact that it had a monopoly on operating systems to extend its monopoly to other markets (web browsers, media players).

Keep in mind that the Supreme Court of the United States affirmed that Microsoft had used tactics to illegally leverage its monopoly positioned.

In short, it's not integration or bundling that causes Microsoft to be regulated. Nor is it Microsoft's monopoly position. It's the illegal use of that position to maintain and extend Microsoft's power into other markets. That's a very important distinction that some seem to miss, and it explains why other operating system makers (like Apple) can get away with integration and bundling, whereas Microsoft can't.

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