Competition law should promote consumer welfare, yet the Commission’s decision does the opposite by discouraging leading firms from improving their products. Microsoft, like most other companies, continually seeks to improve its products. This often means adding or improving features to our software, just as car companies have made stereos, GPS, and other features parts of the standard models they offer. The reason firms do this is obvious – to compete more effectively and attract customers. The real winners of this process are consumers, who benefit from better products and lower prices. The Commission’s decision would deter leading firms from improving their products wherever there is a chance that by doing so, even a single competitor might be less successful. The ultimate victims of the Commission’s position, of course, will be consumers.

The negligible demand for the reduced version of Windows confirms that, in improving the media playback features in Windows, Microsoft was responding to consumer demand, not ignoring it. The 2004 Decision is based on the assumption that, if given a choice, consumers and PC manufacturers would have purchased a version of Windows without media playback features, and would then have to add a different media player to replace those features. In fact, however, there has been effectively no demand for the reduced version of Windows in the more than two years it has been available to European consumers. This proves beyond any doubt that Microsoft’s decision to improve the media playback features in Windows did not force consumers to buy anything they did not want – and certainly did not violate EU law.

Competition law works best when it takes account of prevailing commercial practices. The Commission’s ruling is based on the position that operating systems and media playback software are distinct products and therefore should be offered separately. This fails to recognize that operating systems serve a “platform” function by offering capabilities that other software programs (applications) rely on to run more efficiently. Virtually all operating systems today provide integrated media capabilities as standard because this is what consumers want and what application developers expect. Whether some companies also provide media playback software separately is beside the point. It is possible to sell shoes without shoe laces and aircraft without seats, but the reality is there is no demand for such products. The fact that other companies may offer shoelaces separately does not mean they should not also be sold with shoes, or that a robust market for shoelaces will be damaged as a result. In short, the Commission was simply wrong to conclude that improving the media capabilities in Windows – regardless of whether media playback software is available separately – harmed consumers or competition.