Ruminations on the Digital Realm

Jan Stedehouder

There is nothing wrong with the Dutch software market. At least according to the Dutch Cartel Office

It was expected by some. For the third year in a row the Dutch Cartel Office (NMa) decided there were no reasons to look into the Dutch software market, despite requests made by people in the field of commerce and education and by the Dutch parliament.

In a letter send to me (and perhaps the other writers as well, link to Dutch text), the NMa explains that there is no evidence to suggest an abuse of the dominant market position by Microsoft in such a way that it prohibits other operating systems and software to compete. Since the consumer hardly requests anything else than a computer with Windows, it is no problem for the NMa if that means that vendors pre-install Windows.

Strange enough it has been requested by the Dutch parliament that an investigation into this should take place. The Dutch government recently commenced a new policy that makes the use of open standards by central government organizations compulsory by April 2008 (link to English translation). The current viewpoint of the NMa makes it doubtful if that request by parliament will be met.

The open letter send by OpenSourceLearning and others, however, requested the NMa to take a closer look into the relationship between educational institutions and commercial software vendors in the Netherlands. It is highly disappointing that the NMa not even addresses the issue or explains why it will not investigate the matter. It does state that parts of the software market are international by nature and should therefore be handled by for instance the EU.

This argument is flawed when considering education. The present situation is such that educational institutions are forced to buy their software via a few clearing houses that have contract with a small group of software vendors, who only deliver proprietary software. The result is that almost ICT education that takes place on the primary, secondary and tertiary levels is Windows-only. To make things worse: this is also true for training programs for ICT professionals. Linux or Unix, together making up for the most of the ICT backbone in organizations, are hardly mentioned in the curricula.

The social and economic implications of this situation are clear. Companies and organizations will find it difficult to find skilled professionals for the current ICT infrastructure and are forced to either train their own staff or switch to Windows-only environment. The government will find it more and more difficult to push it’s plans for open source and open standards forward.

It is clear that the NMa decided to turn a blind eye to the Dutch software market and the huge market distortions that are seen. This doesn’t mean that all is lost. The Dutch Ministry of Economic affairs will sit down with the Ministry of Education and see how the new policy can be implemented in and supported by educational institutions. It’s up to us to keep up the pressure and compile a long list of ‘worst practices’.

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3 thoughts on “There is nothing wrong with the Dutch software market. At least according to the Dutch Cartel Office

  1. IMHO you misinterpreted something. The NMa does not state “there is nothing wrong with the Dutch software market”. They are saying that Microsoft does not resort to illegal activities to maintain their monopolistic position, and that they are thus unable to do anything about it, since Dutch law *permits* monopolies/oligopolies. They also mention that it is now up to the Dutch government to do something about it through legislation, enabling the NMa to then do something about it.

    I do agree that there are some activities that *do* enfore Microsoft’s near-monopoly, however, this is performed by _the hardware suppliers_, and thus is not illegal for Microsoft to do.

    Face it: people are unaware of alternatives and thus expect Windows on their PC, and will think something is wrong if it’s not on there.

    Change has to come from the industry and from law makers, not from law enforcers, because law, unfortunately, is insufficient in its current state.

  2. Not completely true. When two large companies in a certain sector wish to merge, they will have to ask permission from the NMa to do it. If the NMa decides that the market share of the new company is considered too big as to hinder competetion and fair pricing, it will not give that permission.

    You could compare it to the Dutch telecom market. The OPTA keeps a close eye on the former state monopolist. The KPN is not allowed to use extremely low market prices to push out new competitors.

    The legal framework to investigate market relations is already there. The NMa doesn’t have to wait for the legislator to come into action. It even stated that it is an independent body that can pursue it’s own investigations. If and when those investigations bring up issues that need to be addressed, but can not be dealt with without further legislation, the NMa can advice to do such.

    However, without prior investigation, the NMa decided the present situation in the software market does not warrant action in 2008. The majority of the ICT related letters requested the NMa to step in and remedy the problem you describe. Unfortunately, the NMa doesn’t even address the issue.

  3. I don’t have the impression this is any different from other regulations. A monopole can be the result of having the best products and there is no sanction on that. Using a monopole to protect an existing monopole or to create an other one is not allowed. For what I understood of it, Microsoft was accused of using it’s monopole in the desktop marked to create one in the browser marked.

    But the NMa states not to have enough indications that Microsoft put pressure on the hardware distributors(OEM) to install only Windows. The OEM would do that only because that’s what the customers want and to reduce costs.

    No better indication than the market itself. I would think that if the Windows license price is a considerable part of the price of a desktop and
    – only the biggest OEM offer a Linux option
    – alternatives are not offered with a considerable price advantage by OEM who offer also Windows
    – multiboot options are not offered as a way to compete with a more flexible product
    – systems without OS are not offered with a considerable price advantage
    that there are strong indications of press ion from MS. At least a few OEM (that also need to distribute Windows) should have tried some of the possibility’s to get an advantage.

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