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Europe's Dumb and Dumber

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I love Europe for travel, the U.K. especially. For business and investing, not so much. There are better markets for your money.

Here's why. Over the weekend, regulators at the European Commission filed a Statement of Objections that accuses Microsoft (Nasdaq: MSFT  ) of stifling competition in the browser market via tying their browser to Windows. According to a press release announcing the ruling:

The evidence gathered during the investigation leads the Commission to believe that the tying of Internet Explorer with Windows, which makes Internet Explorer available on 90% of the world's PCs, distorts competition on the merits between competing web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match. [Emphasis added.]

Lucid. Well-written. And entirely false.

According to researcher Net Applications, Internet Explorer accounted for 68.2% of web searches in December. Trade magazine Computerworld says that's down eight percentage points year over year.

The math speaks for itself, really. If IE is available on more than 90% of the world's computers, yet less than 70% actually use it, then 20% of the population chooses a non-Microsoft browser.

Mr. Softy fares even worse in Europe. French researcher Applied Technologies Internet put IE's share of the Continent's browser market at just 59.5% in November, the last month for which it had IE data, Computerworld says. The open-source Firefox browser held 28% of the market in December.

The worst numbers go to Opera, a relatively well-liked browser created by Norway's Opera Software, which had just 0.7% of the market, according to Net Applications' estimates. Applied Technologies gives Opera 3.3% of the market. Either way, it's the laggard in an emerging category that features not only IE, but also Apple's (Nasdaq: AAPL  ) Safari and Google's (Nasdaq: GOOG  ) Chrome.

Coincidence, right? Nope. Opera helped convince the EU to file the complaint and applauded the decision. "This is extremely important. It's important that people have a choice of browsers. It's important that we don't have one company dominating the browser market," CEO Jon von Tetzchner told Computerworld in an interview.

The EU, in other words, is playing bodyguard for Opera. Not only is that wrong, it shows how little the Continent's regulators think of a historically Web-savvy population that's given birth to Skype and Linux, as well as Microsoft competitors SAP (NYSE: SAP  ) and Nokia (NYSE: NOK  ) .


Further Foolishness from across the pond:

Apple is a Stock Advisor selection. Google is a Rule Breakers recommendation. Microsoft and Nokia are Inside Value picks. Try any of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Apple and Google and a stock position in Nokia at the time of publication.

Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy likes its tea with honey.

Read/Post Comments (9) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 21, 2009, at 4:44 PM, ProUS wrote:

    Norway is not in the EU - so the EU has no reason to favor it over Microsoft.

  • Report this Comment On January 21, 2009, at 5:07 PM, kekfrankos wrote:

    A decade of IE dominance in the browser market (although there were better alternatives in the market) favours the arguments and the decision of the European Commission, don't you think (the IE share going down now is a few years too late)?

  • Report this Comment On January 21, 2009, at 5:28 PM, TMFMileHigh wrote:


    ProUS -- Fair point. Norway's neighbors are EU members.But I would still argue that the EU is bullying in favor of Opera. The data don't support the need for this sort of regulation. It assumes that EU citizens are dumb; I know better.

    kenfrankos -- No, I don't think so. First, because you don't regulate to make reparations for past grievances. You regulate to ensure fair markets moving forward. Second, because the browser market really was different a decade ago. There's more choice now.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool)

  • Report this Comment On January 22, 2009, at 10:37 AM, JoergL wrote:

    The cited paragraph is talking about an advantage of distribution only, and - that is something IE really gets by being tied to Windows. If this is unfair enough to warrant regulation, I'm not sure.

    But I can hardly imagine that this happens on behalf of Opera, the market share of which will not be changed by punishing MSFT. If anything, it could help Firefox and Safari et al. Why should people flock to Opera all of a sudden, when they are so much more interested in the [i]other[/i] alternatives now?

    FWIW, European web sites report that the market share of IE is higher during typical office hours, and shrinks considerably during typical non-working hours. And you can learn that it is companies that still cling to IE because they have proprietary software taylored to IE, because only IE is backed by a big company that you could sue, because IE seems to allow some centralized maintenance which other browser don't seem to offer (not sure here) and probably more reasons that do not apply to private users. I'm afraid that regulation won't change much about this situation, though.

  • Report this Comment On January 22, 2009, at 11:30 AM, decbutt wrote:

    Tim - 70% of people choose IE.

    If it didn't come bundled with win the number that chose IE would be significantly below the 70% currently enjoyed by msft.

    I understand your position, but you argument does not hold water.

    You compound the point by making it obvious that you don't understand which countries are in the EU or why, for historical reasons, Norway's neighbors might not actually like them at all.

    Bad journalism my friend. Shameful, indeed.

  • Report this Comment On January 23, 2009, at 7:55 AM, TMFMileHigh wrote:

    'Morning decbutt --

    >>If it didn't come bundled with win the number that chose IE would be significantly below the 70% currently enjoyed by msft.

    Perhaps. But this assumes that IE is, fundamentally, a bad browser versus competitors. I personally like FF a lot more and am anxious for Chrome on the Mac, but I know a great many who like IE.

    Also, Windows doesn't create a barrier to other browsers. Anyone, anywhere can download and use FF on any supported platform.

    >>You compound the point by making it obvious that you don't understand which countries are in the EU or why, for historical reasons, Norway's neighbors might not actually like them at all.

    Can't argue this. I really blew it on this point. No excuses -- I simply made a poor assumption and I apologize.

    But I caution against using my mistake to invalidate the argument. The EU is toying with the free market where the barrier to entry may as well be nonexistent, and is doing so at Opera's behest.

    Put differently: When MSFT was the target of a U.S. probe, it was Mr. Softy's Silicon Valley enemies -- Sun and Oracle, principally -- that led the fight. Both would later benefit financially from the Justice Dept.'s ruling.

    Thanks very much for commenting and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On January 23, 2009, at 8:34 AM, stockcommander wrote:

    Mile High Hubris

    US has a VERY long history of protectionism - sugar, apples ...

    MSFT has been a target for various probes into their business practices - and there has been some glaring cases where MSFT made changes to their OS that crippled software from competitors. AMI/Lotus WordPro is one case I would like to mention - the product never recovered.

    When MSFT "fixed" their "fix" - they had achieved their goals ...

    You should now - at least I assume that you do now - something about how MSFT operates in these cases. MSFT often achieves their goals - even when a court ruling goes against them - by damaging the reputation of the software from competing companies.

    Going against MSFT in court takes years, and huge financial resources. Even if you win you loose.

    So please get of your high horse.

  • Report this Comment On January 23, 2009, at 8:43 AM, wrparks wrote:

    I'm not an IE user. Strictly firefox.

    But tell me........

    When you boot your computer for the first time, if a browser wasn't installed, where would you get a copy?

    Sure, some have them on thumb drives, and others know FTP.

    But really, most people wouldn't know how to find a browser without a browser and it's ridiculous to expect a company to advertise or promote it's competitors.

  • Report this Comment On January 23, 2009, at 10:33 AM, decbutt wrote:

    Tim -

    I was a little harsh.

    And wrparks point is valid.

    FF - me too.

    But tell me. If you had no car, and you bought a house and it came with a car, would finding a replacement new car be top of your "to do" list, or do you think you'd just use the one that came with a house?

    Actually, I think I have just solved the entire US crisis.


    Can you forward this to Obama plz?


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