Cybersource takes Microsoft war to ACCC

Open source provider Cybersource has filed a complaint against Microsoft with the Australian Competition and Consumer Commission (ACCC), alleging the US software giant has unfairly monopolised the desktop software market.

Con Zymaris, chief executive at Melbourne-based Cybersource, alleged Microsoft has engaged in monopolistic practices that cost consumers and service providers hundreds of millions of dollars a year.

Cybersource had filed a complaint with the ACCC in hope the watchdog would take action to redress the balance in the desktop software sector, he said.

"The only way you get innovation is through competition," Zymaris said. "If I want a server with [certain] features and no operating system, then they comply. But if I go to the vendors and ask for a laptop without an operating system -- fat chance."

Zymaris alleged Microsoft had made it virtually impossible for vendors to sell laptops or desktop computers without Windows pre-loaded. The reseller or end-user who did not want Windows got stuck with it anyway, he said.

"The last thing we want is to pay for a competitor's product," Zymaris said.

Microsoft's tactics had helped it secure and retain 95 percent of the desktop software market. Yet a company like Telstra, with a much smaller percentage of the overall telecommunications market, had often been scrutinised by the ACCC, he pointed out.

It followed that the ACCC might have a role to play to stimulate improved competition in the desktop software market, he said.

"Windows doesn't have a god-given right to be on anyone's PC -- that's just wrong," Zymaris said.

Microsoft was contacted, forwarded details on Cybersource's allegations and asked to respond. The software giant refused to comment.

In a Cybersource statement forwarded to Microsoft, Zymaris claims that the PC hardware market showed "real competion" but in the PC operating system and office "productivity" software areas, innovation and price performance had suffered.

"In fact, the competitive hardware space has shown a 100-fold improvement in price-performance compared to the software marketplace where Microsoft wields dominance," Zymaris said.

"The vendor deals that Microsoft has enacted are strangling competition and blocking the progress of viable alternatives like Linux."

Cybersource had produced a whitepaper examining the cost of Microsoft's alleged desktop software "monopoly" to Australian consumers, and calling for the ACCC to level the playing field.

Zymaris said the total cost was at least $200 million a year and possibly as high as $400 million a year.

"And we'd like anyone else who agrees with us to put their two bits in [to the ACCC as well]," he added.

The Cybersource statement said  the ACCC should require all tier-1 and tier-2 vendors to offer the option of buying all their desktop and laptop products without an operating system pre-installed.

Also, the price difference those with and those without a pre-installed operating system
should be clearly advertised via retailers, marketing material and vendor websites, it said.

Microsoft should also be required to offer unfettered access to all major content, document, data and applications formats that could enable interchange and interoperability between its platform and other platforms, Cybersource said.

"Microsoft has a long history of bullying PC vendors who have dared to introduce alternatives to Microsoft on the desktop," alleged Zymaris.

"We don't know if the PC vendors' hands are tied by invisible shackles orchestrated by Microsoft. However, having the ACCC ensure the 'no operating system' option is made available is the only way of finding out."