Lets suppose The Phalanx moved into the auto business, and we produced the “Phalanx 5000” a 300 horse-power, 4-door sedan with no radio, no air conditioning and no windshield wipers. The 5000, however, was so economical with great pick-up, that consumers purchased the vehicle in great quantities nonetheless. Because the 5000 came with no radio or other accessories, several 3rd party manufacturers decided to produce accessories that could be installed in the 5000. ABC Radio produced a car stereo for the 5000, Johnny’s AC could produce an air conditioning unit and Rain-B-Gone Corp could sell windshield wipers.

As Phalanx Motors became profitable and began to invest more in R&D we decide to include more standard features on the Phalanx 5000, we not only included a radio, AC, windshield wipers but even a heater. With this move companies like ABC Radio, Johnny’s AC and Rain-B-Gone have a choice, they can innovate and produce a compelling product which consumers will purchase even with the inclusion of such standard features on the Phalanx 5000 or they can turn to the government and demand Phalanx Motors not include such features on future models.

Naturally, any court would balk at compelling GM or Toyota to include competitors components in its vehicles, but this scenario perfectly illustrates the predicament of the world’s largest software maker: Microsoft. Regulators in the European Union have expressed concern that the next version of Windows, known as “Vista” will prevent consumers from using competitors’ applications.

"We're concerned about the possibility that the next Vista operating system will include various elements which are currently available separately either from Microsoft or other companies," an EU spokesman noted. “The Commission's concern is that computer manufacturers or consumers might be prevented from having a proper choice between different software packages."

Microsoft has noted that its customers have a plethora of choices to choose from with regard to various software applications. But even if they didn’t, should Microsoft be compelled to give a competitive advantage to its rivals. If Microsoft chose to develop an operating system, which only worked with Microsoft software, would that not be their prerogative? At no point in time have consumers been forced to choose Microsoft, but if they do, one should not expect that company to cede its market share to a rival.

Microsoft, contrary to popular myth, is not a monopoly. Such an economic designation implies a lack of choice, which simply is not the case. Consumers can choose between a number of operating systems and software, including: Apple’s Mac OS, Sun’s Solaris or Red Hat’s Linux, to name a few. To impose such restrictions would be no different than compelling Toyota to give consumers a choice between transmissions from GM, Ford or VW and such restricts on any firm are an affront to the spirit of free enterprise.
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/29/AR2006032900417.html