Microsoft and EU ruling

[meenakshisekar]

MS to open new challenge to EU ruling

Microsoft is set to open a second front in its challenge to a landmark European Commission antitrust decision on Wednesday.

The Commission found in 2004 that Microsoft violated European Union antitrust laws, fined it €497 million ($617.4 million) and ordered it to change its business practices.

Earlier this week, the company fought against a finding that it had killed off consumer incentives to buy other player software and emerged a market leader by bundling its own media player with the Windows operating system, which is used by 95 percent of the world's personal computers.

Starting on Wednesday, Microsoft and the Commission will spend two days arguing over the Brussels finding that the U.S. company had failed to provide information that rivals needed to create software able to run with Windows as smoothly as Microsoft's own products.

The software involved runs work group servers, which are used to print, sign on and manage files and need information -- known as protocols -- to connect to PCs run by Windows.

The 13-member panel of the Court of First Instance, the EU's second-highest court, is expected to take months to decide.

A court ruling against the Commission would curtail its power as Europe's competition watchdog and would allow Microsoft to pursue the business practices that have helped it become a household name around the world.

Microsoft will argue that it has given away plenty of server software information and that providing more would infringe its limited time exclusive rights over innovations that it has worked long and hard to develop.

On Monday and Tuesday, the panel heard a discussion of the Commission finding that Microsoft illegally bundled in its Windows Media player to damage rival makers of streaming audio and video, such as RealNetworks Real Player.

Judge John Cooke, who led the inquiry and will write a draft decision, questioned the reasoning and conclusions of the Commission.

"Is it correct to (say) that Microsoft's action was necessarily abusive?" Cooke asked at one point.

Commission lawyer Per Hellstrom argued that Microsoft should have sold Windows Media Player as a separate program, competing on a level playing field with other streaming audiovisual software such as RealNetworks Real Player.

But Cooke probed the wisdom of that approach.

"The Commission appears to have taken a policy stand that it wants to separate the operating system from the applications market," he said to Hellstrom.