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Windows Is to Drop Browser in Europe - WSJ.com
Windows Is to Drop Browser in Europe By JESSICA HODGSON and CHARLES FORELLE Microsoft Corp., facing antitrust concerns in Europe, will release the coming version of its Windows operating system, Windows 7, without a Web browser in the region. The move comes after European Union regulators said in January that including a browser in Microsoft's Windows operating system likel......

Windows Is to Drop Browser in Europe

By JESSICA HODGSON and CHARLES FORELLE

Microsoft Corp., facing antitrust concerns in Europe, will release the coming version of its Windows operating system, Windows 7, without a Web browser in the region.

The move comes after European Union regulators said in January that including a browser in Microsoft's Windows operating system likely breached European antitrust rules. Windows is on more than 90% of the world´s computers.

In a statement on the company´s Web site Thursday, Dave Heiner, Microsoft´s deputy general counsel, confirmed the plans affecting its Internet Explorer browser software. "Given the pending legal proceeding, we´ve decided that instead of including Internet Explorer in Windows 7 in Europe, we will offer it separately and on an easy-to-install basis to both computer manufacturers and users," he said.

"This means that computer manufacturers and users will be free to install Internet Explorer on Windows 7, or not, as they prefer."

Microsoft´s move comes after EU regulators said in January that including a browser in Microsoft´s Windows operating system likely breached European antitrust rules. Windows is on more than 90% of the world´s computers.

The statement followed an earlier report from CNet.com. Windows 7 is scheduled to be generally available Oct. 22.

EU authorities have long been at loggerheads with Microsoft over its bundling practices, whereby one piece of software is included free with another one, which is sold. In early 2008, Microsoft was fined for noncompliance with an earlier ruling that found that it had breached antitrust law by not making technical information relating to its Media Player software available to rivals.

In the market for browser software, Microsoft is battling rivals such as Firefox, a browser made by the nonprofit Mozilla Foundation, as well as Google Inc. and Apple Inc., both of which make browser software. The company´s decision to respond to EU concerns by releasing Windows 7 without Internet Explorer came as a surprise to European Union regulators, who were considering a different kind of remedy.

Relying on case law established during its earlier action involving the Media Player software, the EU has been preparing to bring a formal case that would call for Microsoft to provide a "ballot screen" with Windows that allows users to choose which browsers they want installed.

In a statement issued late Thursday night in Brussels, the EU regulator said it "notes with interest" Microsoft´s announcement and would "shortly decide" the outcome of its own case. But it didn´t seem confident that offering the operating system without Internet Explorer was the complete answer to its concerns that computer users lack "genuine" choice in browsers.

"Rather than more choice, Microsoft seems to have chosen to provide less," the EU said in its statement.

It isn´t clear how Thursday´s announcement will affect the case. For one thing, the scope of the EU´s investigation dates to 1996 -- which means it still could levy substantial fines for the 13 years during which the browser was integrated, even if it finds that the separation allays its concerns going forward.

In past Microsoft antitrust actions involving Media Player and programming information needed to make other computers work well with Windows, the EU has assessed more than $2 billion in fines.

Among the EU´s remaining concerns are whether Microsoft could induce computer manufacturers to install a stripped-out Internet Explorer back into Windows before shipment, and how consumers who bought PCs at retail stores would get any browser on their machines at all.

Meanwhile, Microsoft´s share of the browser market has shrunk in recent years, raising questions about the need for government intervention. According to Net Applications, which tracks browser share, Internet Explorer has 66% of the market, while Firefox has 22%. As little as two years ago Microsoft had over 80%.


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MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4208

IAB Lobbies in D.C.
IAB Lobbies Washington DC against controls -By Mike Shields NEW YORK Concerned about potential regulatory moves by the Obama administration and the Democratic-controlled Congress, the Interactive Advertising Bureau has descended on Washington, D.C., armed with research conducted by a pair of Harvard Business School professors to make the industry’s case to lawmakers. According t......

IAB Lobbies Washington DC against controls

-By Mike Shields

NEW YORK Concerned about potential regulatory moves by the Obama administration and the Democratic-controlled Congress, the Interactive Advertising Bureau has descended on Washington, D.C., armed with research conducted by a pair of Harvard Business School professors to make the industry’s case to lawmakers.

According to a new study issued by the IAB on Wednesday, online advertising is responsible for $300 billion of economic activity in the U.S. -- or 2.1 percent of the nation’s gross domestic product. Plus, over 3 million people are employed in the U.S. thanks (at least in part) to the online ad business, including 1.2 million with high-paying jobs that did not exist two decades ago, says the study.

Those figures were compiled by Harvard Business School professors John Deighton and John Quelch, along with Cambridge, Mass.-based Hamilton Consultants.

The fact that the IAB turned to Harvard to produce such ammunition underscores just how serious the organization is taking the regulation issue. For example, some industry insiders fear that in the current pro-regulation environment, lawmakers could come down inordinately hard by placing prohibitive restrictions on nearly all forms of ad targeting that employ consumers’ Web-surfing data.

“The results of this study confirm the vast influence and driving importance of the ad-supported Internet to the overall economy,” said Randall Rothenberg, IAB president and CEO. “By understanding the total contribution of the Internet to the U.S. economy, we can more accurately assess the impact of potential legislative changes on the Internet’s operations, particularly the consequences of any actions that would alter ad-supported business models.”

In addition to the research, the IAB is using its Washington visit to announce the official launch of the Long Tail Alliance, a group that will focus on issues related to small, advertising-supported Web businesses.


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MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4207

Online shopping requires effective supervision - People's Daily Online
Online shopping requires effective supervision China's online shopping market has seen vigorous transactions and is becoming increasingly popular among consumers. However, due to a lack of supervision, consumers still feel unsafe. A report by the Internet research organization iResearch indicates that China´s online shopping market recorded a turnover of 120 billion yuan in......

Online shopping requires effective supervision

China's online shopping market has seen vigorous transactions and is becoming increasingly popular among consumers. However, due to a lack of supervision, consumers still feel unsafe.

A report by the Internet research organization iResearch indicates that China´s online shopping market recorded a turnover of 120 billion yuan in 2008, up 128.5 percent year-on-year. China´s leading e-commerce website Taobao.com sold an average of 26 cell phones, 266 items of clothing and 136 cosmetic products per minute in 2008.

Despite its huge attraction, in general online shopping has problems such as exaggerated advertising, passing off inferior goods as high-grade ones, and harsh conditions for product returns or replacement. Netizens are also worried about the safety of money transfers.

An officer from China International Electronic Commerce Corp. said credibility is not an issue exclusive to the Internet environment. In addition to the lack of credibility of some online shop owners and a lack of management standards for operators of the online shopping website, a major problem is that supervision is not in place. If buyers receive fake goods, technically there is not much they can do about it.

Online shops are spread all over the country and most of them do not have industrial and commercial registration. This poses certain difficulties for supervision.

Recently service merchants such as Taobao.com established their own grading and complaint-lodging systems but consumers still have doubts about their effectiveness. Zhang Zhengfeng, associate professor of the School of Public Administration at China´s Renmin University, said online shops cannot avoid policy supervision forever and must be regulated under standardized management just like traditional stores.

The Beijing Administration for Industry and Commerce last year became the first in China to require all profit-generating online stores to apply for operational licenses. This approach provides a basis for law enforcement in terms of management and guides individual online business operators to adopt standardized operations.

Most online shopping websites now adopt the third-party guarantee payment system, such as Alipay, used by Taobao.com, and Anfutong, used by Eachnet.com. When using these payment tools cash is paid on delivery and therefore the system is safer. But if buyers need to return purchases for reasons other than a quality-related problem, sellers often find it hard to agree, and hence typically a dispute emerges.

An industry insider said dispute settlement mechanisms must be established and improved, and consumers are better off choosing large-scale service institutions and sellers with sound credibility in order to strengthen safety.


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MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4182

EU Plans Fresh Strike on Microsoft - WSJ.com
EU Plans Fresh Strike on Microsoft By CHARLES FORELLE BRUSSELS -- Frustrated with past efforts to change Microsoft Corp.'s behavior, European Union regulators are pursuing a new round of sanctions against the software giant that go well beyond fines. The regulatory push is focused on a longstanding complaint against Microsoft: that it improperly bundles its Web browser with its......

EU Plans Fresh Strike on Microsoft

By CHARLES FORELLE

BRUSSELS -- Frustrated with past efforts to change Microsoft Corp.'s behavior, European Union regulators are pursuing a new round of sanctions against the software giant that go well beyond fines.

The regulatory push is focused on a longstanding complaint against Microsoft: that it improperly bundles its Web browser with its Windows software. Rather than forcing Microsoft to strip its Internet Explorer from Windows, people close to the case say, the EU is now ready to try the opposite measure: Forcing a bunch of browsers into Windows, thus diluting Microsoft´s advantage.

The sanctions would come from an EU investigation that began last year. In a sign of how rapidly the case is progressing, these people say, the possible penalty has emerged as a key focus in discussions between the parties.

The potential action would be a sharp parting blow by Europe´s competition commissioner, Neelie Kroes, as she enters the waning months of a term marked by aggressive enforcement. This month, Mrs. Kroes hit semiconductor maker Intel Corp. with a record antitrust fine of $1.48 billion.

The EU hasn´t made a final ruling on Microsoft, and likely won´t for at least several weeks. An EU spokesman says any sanction against Microsoft "would be based on the fundamental principle of unbiased choice."

A spokesman for Microsoft says it is committed to "full compliance" with EU law.

The EU has stacked up more than $2 billion in fines against Microsoft since 2004. Mrs. Kroes has taken a hard line -- calling out Microsoft as not compliant and more than doubling the original penalties.

Still, all of the fines have outwardly changed little about how the software giant does business.

The EU´s bid in 2004 to separate Microsoft´s Media Player multimedia software from Windows is widely viewed as a timid solution that failed. Now, emboldened by a 2007 court ruling that upheld the 2004 case and confirmed the EU´s wide discretion, regulators are inclined to go further.

People close to the case say EU regulators are inclined to demand a so-called ballot screen that would present a new computer user with a choice of browsers to install, and the option to designate one of them as a default. Regulators have also signaled that they may require Microsoft to ensure contractually that computer manufacturers keep the ballot screen on machines they ship.

In discussions with regulators and in confidential filings made to the EU this week, competing browser makers are also urging a requirement that Microsoft offer alternative browsers to millions of existing Windows users via an automatic download, these people say.

"To be effective, a remedy must present users with a real choice in browsers, and make it easy for them to execute that choice," says Julia Holtz, senior competition counsel in Europe for Google Inc., which makes the Chrome browser.

The EU sent preliminary charges to Microsoft in January. In a securities filing that month, the company said the EU might "obligate users to choose a particular browser when setting up a new PC" and require manufacturers to "distribute multiple browsers on new Windows-based PCs."

The EU is wrapping up the collection of written submissions from Microsoft, from Opera Software ASA, a small Norwegian browser maker whose complaint sparked the case, and from a constellation of third parties, which were due this week.

A ruling could arrive in the coming months, before Mrs. Kroes, who has long made plain her distaste for Microsoft´s conduct, leaves office and a new set of European commissioners are seated. Any ruling would almost certainly face years of appeals in EU courts.

In its legal filings to the EU, Microsoft questioned whether the EU can legally require it to offer other makers´ browsers, people familiar with the matter say. It has also argued that PC users are capable of downloading other browsers like the Mozilla Foundation´s Firefox and Google´s Chrome, these people say, and noted that alternate browsers have recently been gaining users while Internet Explorer´s market share is falling.

Internet Explorer´s share among Web surfers in Europe, which was above 80% a few years ago, has fallen to about 48% as of April, according to StatCounter, which tracks Web traffic. Firefox was No. 2 with 39% of the market with the balance going to Apple Inc.´s Safari, Opera and Chrome. The gulf between Internet Explorer and other browsers is wider in the U.S.

Bloomberg News

Neelie Kroes, Europe´s antitrust regulator, has taken a hard line against Microsoft and its chief executive, Steve Ballmer (below). As her term winds down, Mrs. Kroes is preparing new sanctions.

A History of Combat

Key dates in the EU´s antitrust battles with Microsoft Corp.

March 24, 2004: EU says Microsoft broke antitrust law by denying technical information to competitors and bundling its Media Player software with Windows, levies €497 million fine.

July 12, 2006: Microsoft is fined €280.5 million for non-compliance with the ruling.

Sept. 17, 2007: EU´s Court of First Instance upholds the 2004 ruling, in a blow to Microsoft.

Oct. 22, 2007: Microsoft agrees to drop any further appeal.

Dec. 13, 2007: Norwegian browser maker Opera Software ASA files complaint over the ties between Internet Explorer and Windows.

Feb. 27, 2008: Microsoft is fined €899 million for non-compliance with the 2004 ruling.

Jan. 15, 2009: EU sends preliminary charges to Microsoft, saying it believes the inclusion of Internet Explorer in Windows is illegal.

Action by the EU against Microsoft would go beyond what counterparts in the U.S. have done. The U.S. Department of Justice brought browser-bundling allegations against Microsoft in the 1990s and at one time sought to break up the company, but wound up settling the case without forcing big changes in Microsoft´s practices.

European law has long held that a company dominating the market for one product generally can´t "tie" another product to its sales. In a key 1991 case, the European Commission -- the bloc´s executive arm -- ruled that Tetra Pak, the dominant maker of machines that package milk into cartons, couldn´t require that customers buy their cartons from it alone; a 1987 ruling similarly went against a maker of nail guns and nails. European courts upheld the commission in both cases.

The Media Player dispute extended the jurisprudence of nail guns and milk cartons into the world of software. Despite protests by Microsoft that the low cost of downloading lets consumers easily choose another piece of software to watch videos, the commission found in its 2004 ruling that Media Player was illegally tied to Windows. An appellate court agreed and Microsoft later dropped its legal challenge.

The EU´s remedy was out of the milk-carton playbook: It ordered Microsoft to sell a version of Windows without Media Player. Microsoft did, but at the same price as the full version. Not surprisingly, it barely registered any sales.

In a sense, the Web browser ballot screen is the biggest legal leap the EU is taking: A requirement to carry a competitor´s product is a step usually taken in cases where the competitor has limited or no access to a distribution network -- for instance, operators of electric grids who also sell electricity might be required to let other producers sell power on the grid.

Still, the EU is likely to argue that it has broad powers to fashion an effective remedy. "There´s nothing in EU law that requires the remedy to be a mirror image of the infringement," says Thomas Vinje, a lawyer at Clifford Chance LLP who represents Opera Software.

It isn´t clear which browsers would be listed on the ballot screen, nor how the browsers would be installed. Competitors are arguing that the EU should insist that Microsoft "preload" Windows with other browsers so users don´t have to download the software. The competitors say many users who attempt to download a new browser quit midway through.

Also unclear is how, or whether, the EU could insist that computer manufacturers preserve the ballot screen on Windows before shipping the machine. That concept has raised hackles with some smaller computer manufacturers.

"What you are imposing on them -- against their will -- is a customer-support and technical-support burden," says Lars Liebeler, a lawyer for CompTIA, a trade association that represents some PC maker and has filed papers on Microsoft´s side with the EU. (Microsoft is a paying member of CompTIA.)

"This is a remarkable step by the commission, to now take over the process and mandate what can be put on a computer," Mr. Liebeler adds.


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MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4149

EU Takes Action Over UK Internet Privacy Violations

The European Union started legal action against Britain on Tuesday for not properly implementing EU privacy rules to protect personal electronic data. The EU also warned that it could force social networking sites like Facebook or MySpace to hide minors' profiles from search engines.

[Estimated timeframe:2009-]

The European Commission -- the executive branch of the EU -- said Britain should outlaw Internet traffic interception and monitoring unless users give explicit consent that their behavior can be tracked and analyzed.

The commission said the use of a technology known as "Phorm" by U.K. Internet-service companies to monitor web-surfing and deliver targeted advertising violates some data-privacy rules. The commission said the U.K. hadn't required operators to gain the consent of users before gathering their personal data.

"Such a technology in the view of the European Commission and European data protection law can only be used with the prior consent of the user," said EU spokesman Martin Selmayr.

On Tuesday, regulators sent a first legal warning to Britain asking it to explain or change the way it interprets EU rules, because it currently allows Internet traffic interception when it is unintentional, or when a tracker has 'reasonable grounds' to believe that consent was given.

Britain has two months to respond. The European Commission can issue more warnings before taking a government to an EU court, where it may be ordered to change national law or face daily fines.

BT sought consent from users when it tried out Phorm from October to December 2008 in an invitation-only trial. The company says on its website that the trial didn't keep or pass on information that could identify users and what they did. It gave no comment on the EU statement Tuesday.

Internet companies, privacy advocates and regulators disagree on what kind of traffic data is personal -- such as IP addresses that give a location -- and whether storing information on a crowd of people might evade strict privacy rules because they can't be identified individually.

Phorm plans to work with three Internet operators reaching 70% of Britain's broadband market -- BT Group PLC, Virgin Media Inc. and Carphone Warehouse Group PLC's TalkTalk. Virgin said it would like to try out the technology but would do so only with users' consent.

A message left with the London office of Phorm Inc. wasn't immediately returned. Britain's Information Commissioner's Office, which is charged with protecting personal information in the country, said it couldn't comment on the EU move.

Separately, EU Media Commissioner Viviane Reding said that social networking sites needed to move fast to step up default privacy settings, especially for younger users – and that she would table new EU rules if sites didn't act.

"Is every social networker really aware that technically, all pictures and information uploaded on social networking profiles can be accessed and used by anyone on the web?" she asked in a video message. "Do we not cross the border of the acceptable when, for example, the pictures of the Winnenden school shooting victims in Germany are used by commercial publications just to increase sales?"

Ms. Reding also warned about radio frequency identification, or RFID, tags that can be used as an electronic label on clothing or food to pass on information such as expiry dates or prices to a store cashier or stock checker.

"No European should carry a chip in one of their possessions without being informed precisely what they are used for, with the choice to remove or switch it off at any time," she said.

Stores and other smart-tag users complain that some of the requirements to inform customers or switch off the tags could be burdensome and unnecessary, and might prevent them from investing in the new technology.


All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: WSJ.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=3911



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