The Melbourne, Australia-based consulting, training, and development vendor has written to the ACCC detailing how it believes Microsoft’s monopoly in the desktop operating system and application space is harming Australian consumers.
It has called on the ACCC to require tier one and tier two PC vendors in Australia to offer desktop and laptop products without a pre-installed operating system, arguing that it will level they playing field for Microsoft’s competitors and increase consumer choice.
It has also requested that the ACCC force Microsoft to offer unfettered and unencumbered access to all major content, document, data, and applications formats which could enable interchange and interoperability.
Cybersource’s reasoning for the second request is that Telstra Corp, the Australian telecommunications incumbent, is obligated to provide interoperability with competitors and universal service coverage.
When one vendor has over 95% of the market, that vendor should be bound by a universal service obligation to ensure that all consumers can access the content, documents and data which reside on that vendor’s platform, argued the company in a white paper backing up its complaint.
The white paper noted that while computer hardware constituted 85% of the cost of a new PC in 1994, with the operating system and productivity software constituting 15%, by 2004 the cost of the software had risen to 65%, while hardware costs have fallen to 35%.
The company has estimated that the cost to Australian consumers of Microsoft’s monopoly position is at least AUS 200m ($151m) a year, although that calculation is based on an assumption that Windows and Office account for 50% of the company’s AUS 1bn ($759m) annual Australian revenue, and that its 80% profit margin for those products should be more like 10%.
In areas where vendors do not pre-install a Microsoft operating system, for example the server market, Linux has gained around 30% of the market and has led to an increasingly fierce and competitive battle, as should be the case, noted Con Zymaris, Cybersource CEO. We want the same battle to occur on the desktop. This can only benefit the consumer, through better products at lower prices.
