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Sludge Report #93 – Freedom Is Just A Click Away!

Inside This Edition: It's Official - XtraMSN Is Not Abusive (Legally Anyway) - But You Too Can Be Freed From XtraMSN!

NOTE: Authors of this report will be anonymous and wide ranging, and occasionally finely balanced. Indeed you are invited to contribute: The format is as a reporters notebook. It will be published as and when material is available. C.D. Sludge can be contacted at sludge@scoop.co.nz. The Sludge Report is available as a free email service..Click HERE - http://www.scoop.co.nz/mason/myscoop/ to subscribe...

Sludge Report #93

XtraMSN Not Abusive - You Too Can Be Freed From XtraMSN!

Sludge now has it officially. The new XtraMSN portal - http://xtramsn.co.nz/ is not an abuse of a monopoly position according to the guardians of New Zealand commerce.

In May Sludge opined in a lengthy discourse on the likelihood that the new Xtra-Microsoft partnership, and the imminent launch of Windows XP, will be used to a) degrade the standards of content presentation on the New Zealand web, and b) further abuse the two companies dominant positions in both the NZ web-surfing and browser markets. (See… Sludge Report #67 – Playing Monopoly On The NZ Web
http://www.scoop.co.nz/mason/stories/HL0105/S00123.htm
)

Not content to just confine the objection to the columns of Scoop. Sludge forwarded the column on to the Commerce Commission – who have now replied.

The following is the full 13 point text of why the Commerce Commission do not consider either the new Xtra-Microsoft partnership, nor the launch of Windows XP, abusive in terms of New Zealand commerce law.

*******

RE: TELECOM / MICROSOFT INTERNET PORTAL


1. I refer to our telephone conversation of 14 May 2001 and to your subsequent e-mail of 27 June 2001 regarding the agreement to merge Telecom’s Xtra portal with Microsoft’s MSN portal in New Zealand (“the agreement”). The agreement has resulted in the launch of a new internet portal xtra.msn.co.nz.

2. You state that through the agreement Microsoft and Telecom “intend to abuse their dominant position in the browser distribution market”, and you have requested that the Commerce Commission (“the Commission”) investigate whether the agreement breaches the Commerce Act 1986 (“the Act”).

3. As a general rule, the Commission does not investigate prospective anticompetitive conduct unless such conduct can be predicted as a result, or likely result, of existing behaviour or an existing agreement.

4. Commission staff have assessed the information provided and, for the reasons outlined below, the agreement does not appear to breach the Act.

Section 27

5. Section 27 prohibits contracts, arrangements or understandings (“arrangements”) that have the purpose, effect or likely effect of substantially lessening competition in a market. To establish whether arrangements have caused a substantial lessening of competition, or are likely to, the Commission assesses their overall impact on competition in the relevant markets. This involves measuring their impact on existing competitors and on the ability of new competitors to enter these markets.

6. The information you have provided does not indicate that the agreement will result in a substantial lessening of competition in any market. The agreement does not appear to diminish the ability of other internet media businesses to compete, nor does it appear to have perceptible effect on the ability of Microsoft’s competitors to trade in or offer competitive web browser software.

Section 36
7. Section 36 addresses unilateral conduct by businesses and cannot address the collective behaviour of Telecom and Microsoft. The Act has recently been amended by the Commerce Amendment Act 2001 to prohibit a business that has a substantial degree of power in a market from using this position to restrict the entry of any person into any market, or prevent or deter any person from competing in any market, or eliminate any person from any market. To breach this section of the Act a business must have
(a) a significant degree of power in a market; and
(b) be using this position for a prohibited purpose.
8. In terms of section 36, the information you have provided does not suggest that either Telecom or Microsoft have acted with an anticompetitive purpose in entering the agreement, or meeting any obligations under the agreement. Based on the information provided, Commission staff do not consider that either business has breached section 36.

Section 47

9. Section 47 of the Act prohibits a business from acquiring another business if the result of this would be the realisation or strengthening of a dominant market position. A business that believes a proposed acquisition could breach the Act should seek a clearance or authorisation from the Commission.

10. Despite the agreement being referred to as a merger of internet portals, Commission staff do not consider that the agreement can be considered a business acquisition in terms of section 47 of the Act.

Conclusion

11. As the agreement does not appear to raise issues under the Act, the Commission does not propose to take this matter further.

12. Please note that the above comments are a preliminary view of Commission staff only based on information you have provided and not a ruling of law. Only the courts can decide whether the conduct you describe breaches the Act.

13. You should be aware that the Act specifically provides for action by individuals and this option remains open to you. You should also be aware that the above comments do not preclude the Commission from taking action in respect of the agreement should an anticompetitive effect become apparent at a later date


Yours faithfully


Tom Thursby
Investigator
Business Competition Branch

*******

C.D. Sludge is, to express it as mildly as possible, not at all amused.

Looking at the now launched XtraMSN portal (See… http://xtramsn.co.nz/home/) it is clear that nothing has changed in either the Xtra or the Microsoft psyche of web publishing as a result of their new relationship.

With one solitary exception – a link to http://www.mp3.net.nz/mp3/home mp3.net - the only places you can go from the XtraMSN homepage are elsewhere inside the Xtra and Microsoft web publishing empires.

The much vaunted upgrade of the site is in fact little more than a minor facelift. Once inside the site you quickly find yourself back inside the poorly presented and poorly designed old Xtra site. Even the old dysfunctional search-engine is still there.

While both Xtra and Microsoft immensely benefit from their being a rich content environment for web users outside of their respective empires – they seemingly wish not to acknowledge the blood sweat and tears of the countless web publishers out there, who make it so.

At the very least one might have thought that Microsoft and Xtra would include links to “featured sites of the day” on their front page to indicate that there is a world on the net other than the bits they themselves have built.

But You Too Can Be Freed From XtraMSN!

And so in the circumstances, with the authorities seemingly unwilling to look much further than the ends of their noses, Sludge can only suggest Kiwi internet users use the only method they can to express their disappointment – boycott the XtraMSN site. And encourage friends, family and colleagues to do the same. Afterall it is not as if you will be missing anything. And who knows if enough people do it then maybe they will get the message.

The way to do this, if you do not already know, is to change your default home page setting.

It is a simple and painless process, though the enormous amounts of traffic that XtraMSN’s home page generates tends to indicate that most web users in New Zealand anyway haven’t yet discovered it.

The following are step by step instructions on how to free yourself from XtraMSN.

1. In Microsoft Explorer’s toolbar Click on the “Tools” tab.
2. Select “Internet Options”
3. In the box at the top underneath where it says “you can change which page you use for your home page”, type in the name of another page, e.g. “http://www.scoop.co.nz/”
4. Press the OK button

And from then you will be free of the worlds of both Xtra and Microsoft!

SUBSCRIBERS - PLEASE PASS ON THIS MESSAGE TO AS MANY PEOPLE AS YOU THINK WOULD BENEFIT FROM IT!

READERS - PLEASE CUT AND PASTE AND EMAIL TO FELLOW FREEDOM LOVERS!

Anti©opyright Sludge 2001


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