Neelie Kroes - EU Competition CommissionerDear Mrs Kroes:

I found this picture of you at the Daily Mirror’s website and hopefully won’t run afoul of copyright by posting it here. It seems that you’ve been sucking some lemons lately, which gives you the acidy stomach that you feel compelled to beat up companies that have a better understanding of real market dynamics than you do.

I read the Wall Street Journal’s discussion of your plan to fine Microsoft (sub. may be required) and am shocked that you haven’t explored a much more effective lever at driving market share.

Sad as this may seem, continuing to fine Microsoft for including a FREE browser products in it’s paid-for Windows is not only silly, but highly counter-productive – unless you’re a government bureaucrat about to leave government for private practice where your reputation for aggressive action can be a marketing asset for your firm, or unless you are a lawyer defending the company from your aggressive and heavy-handed regulatory action.

Remember, we’re talking about a FREE product here. In my experience, if a vendor such as Opera can’t compete by giving their product away, maybe they should pay customers? If you are stuck enforcing a silly law, shouldn’t the law be changed? Frankly, the philosophy of being kind to your competitors does nothing except prolong the inevitable demise of loser firms.

Your Intel fine (record $1.48 billion) for the use of volume discounts should give customers at the end of the supply chain the kind of business advantage that their scale deserves. How else can consumers get lower prices when buying one commodity-ish product versus another? It is only logical that the large buyer ought to be able to use price leverage to their advantage – because they have so few other advantages – as compared to the local business owner who can customize and offer personal services that customers may or may not be willing to pay extra for. That’s the beauty of a free (as in free from unintended consequences and free from interference) economy. These valuations happen every day, millions of times around the world.

I believe that you’re using the wrong lever to get Microsoft to respond to the needs of its competitors. Instead of constantly yelling and fining and yelling and fining Microsoft, why not insist that they charge 1 Euro for every Internet Explorer shipped? Using the price lever to force Microsoft to position the product as a premium to their OS will signal to the European user that it costs extra to the zero priced Opera.

Of course, the finer details will be as nasty as the legal route that you’re already on. Imagine ordering a privately owned company the price they can charge for their product or service – and imagine the scandal when that price is HIGHER than zero, which is what the company wanted to sell it for.

This is so much nonsense. Talk about Don Quixote tilting at windmills. The only thing imaginative here is the dollar amounts.

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