Jeremy Warner's Outlook: Never mind Brussels' strictures, Microsoft's hegemony is on the wane in any case

NatWest Three: another bizarre twist; Everyone's favourite bogey: Metronet
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The Independent Online

European Competition regulators are proving somewhat more robust in pursuing Microsoft for alleged anti-trust infringements than their US counterparts. Back in March 2004, the European Union fined Microsoft an unprecedented €497m (£344m) for abusive and predatory behaviour.

Now a further €280.5m fine has been imposed for failure to make operability information on Windows available to rival server providers. If Microsoft hasn't complied by the end of this month, further fines of €3m a day will be levied. Meanwhile, the US Justice Department is still dragging its feet in forcing compliance of similar orders made as long ago as 2000.

Is this difference in approach explained by the fact that Microsoft's hegemony is an American one, which the US is naturally more reluctant to challenge than foreigners? There may be something in this, yet Microsoft's defence of monopoly, sometimes pursued in abusive fashion, is in many respects yesterday's story. The more interesting one is quite how quickly the company's position is being broken down by the power of innovation and the market. Microsoft's share of the global software market is fast declining. Its attempts to defend it seem quite incapable of countering the march of technological progress.

NatWest Three: another bizarre twist

I hesitate to use such a hackneyed old cliché, but you really couldn't make it up. The apparent suicide of a key witness in the case of the NatWest Three adds another bizarre twist to an affair which has already galvanised the City into an unprecedented outpouring of anti-American, anti-Labour government feeling over the supposed injustice of this white-collar extradition.

Was it the pressure of the case that prompted this former Royal Bank of Scotland treasurer to take his life? Or perhaps, if he was to be a prosecution witness, he could no longer live with the idea of damning a threesome who have managed through clever PR to win widespread public sympathy?

Whatever the answer, his death is unlikely to have any bearing on the extradition, which as of last night was due to proceed today with the three required to report at first light to Croydon police station. From there, they were to be taken to Gatwick airport and the 10-hour flight to Houston, Texas. It is impossible to imagine what these former investment bankers must be going through. No one of professional background ever expects to find themselves in such a nightmarish position. Yet as their supporters have always argued, it is not the innocence of the NatWest Three which is being defended here, but ancient British liberties and freedoms which have been given away by the Government to the US under a disgracefully one- sided extradition treaty.

Strangely, you hear little or nothing from these "campaigners for justice" about the 23 others facing extradition under this supposedly iniquitous treaty - an oddball mix of alleged rapists, terrorists, child pornographers, drug traffickers and less high-profile fraudsters.

White-collar crime, nearly always committed by those of otherwise good character, cannot in any way be regarded as comparable to these obviously more shocking offences, yet the lamentably low standards of proof required of the US to win a successful extradition are the same whatever is alleged. There's no Daily Telegraph campaign, no Sir Digby Jones, no member of the House of Lords to stand up for what may be an equally heinous miscarriage of justice among this unsavoury bunch of ne'er-do-wells.

I have to confess to feeling faintly uneasy about such double standards. Sir Martin Jacomb, one of the campaigners against the treaty, once referred to insider dealing as "a victimless crime", as if white-collar offences were somehow deserving of little more than parking tickets because few are obviously harmed or offended by them.

Just try telling that to the thousands of Enron employees who lost their jobs and pensions in Ken Lay's unrestrained orgy of corporate greed. There cannot be special treatment for the NatWest Three simply because they are nice, middle-class people.

Everyone's favourite bogey: Metronet

They were handing out free bottles of Metronet water on London's District Line yesterday, for which many thanks, given the heat. Yet I doubt it will help the company's case with Ken Livingstone, the London mayor. For him, Metronet is the devil incarnate, a thieving bunch of private sector operators who, to judge by the steady flow of breakdowns on the Tube, couldn't so much as run a whelk stall.

Metronet faces further condemnation in a London Underground assessment next week of how the public private partnership on the Tube has performed over the last year. Few people caught in the seemingly endless series of operationally related shutdowns and stoppages are going to disagree with its strictures.

Yet though Metronet gets the lion's share of the criticism, it is arguable as to whether its performance is in fact any worse than that of its rival operator, Tube Lines. Metronet is responsible for operating and modernising some two-thirds of the network, against Tube Lines' third, so it is bound to encounter a larger proportion of the problems. Even so it is Metronet where the mayor's opprobrium is concentrated. Is this fair?

Metronet and Tube Lines operate according to significantly different business models. With Tube Lines, now wholly owned by Bechtel and Ferrovial, all contracts are put out to tender on an arm's length basis, though both these owners earn significant fees from the staff they second to the company. They have won a number of lucrative contracts from it.

Metronet, by contrast, is set up as more of a workshare for the owners. At least three of the company's five shareholders - WS Atkins, Balfour Beatty, and Bombardier - are only invested in the equity for the work they expect to get out of it. This creates an obvious conflict of interest which nearly always creates problems for projects of this sort. Are these owner/ contractors in it to manage the contract for optimum efficiency, orfor the revenues they earn from the work? The two priorities pull in very different directions.

As it happens, the rewards derived from this work have so far been mediocre to non existent. WS Atkins for one believes the resources it has devoted to the work could have been much more profitably deployed elsewhere. Indeed, in this respect, the PPP contract is working just as it was supposed to, with poor performance being punished by lower rates of remuneration. Failure to perform has had direct adverse consequences for these companies in a way that would not have occurred had the public sector carried out the work.

Perhaps the London mayor could have done better had he been in charge. There's no way of knowing, yet the history of publicly managed infrastructure projects, which hardly ever come in on time and to budget and generally involve much higher levels of disruption than we are seeing at the moment on the Tube, suggests powerfully that he could not.

As it is, some £17bn of capital expenditure over seven and a half years has been committed to the Tube in a way that wouldn't have happened without PPP. Metronet's performance has been far from blameless; yet, warts and all, it may still be the least bad solution to the Tube's crying need for modernisation and investment.

j.warner@independent.co.uk

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