BELGIUM/FILE: European court to rule whether Microsoft abused its near-monopoly position on the world's computer market

Record ID: 451950

  • Title: BELGIUM/FILE: European court to rule whether Microsoft abused its near-monopoly position on the world's computer market
  • Date: 17th September 2007
  • Summary: CLOSE UP: EXCERPT OF FILE WITH TITLE READING 'MICROSOFT v COMMISSION' WORD 'INTEROPERABILITY' BEING UNDERLINED COVER WITH TITLE READING 'REPORT FOR THE HEARING' WORDS READING 'DOMINANT POSITION' LAWYERS WALKING AND ENTERING COURTROOM TROLLEY WITH FILES BEING WHEELED IN BRAD SMITH, MICROSOFT GENERAL COUNSEL, IN COURT
  • Embargoed: 2nd October 2007 13:00
  • Keywords:
  • Topics: European Union
  • Reuters ID: LVADMOVZ9NV2QMKJDAR54AZL433J
  • Story Text: European court will rule whether Microsoft abused its near-monopoly position on the world's computer market and used its power to push smaller competitors out of the marketplace.
    A European Union court will rule on Monday (September 17) if Microsoft abused its near-monopoly position on the world's billion computer market to push smaller competitors out of the marketplace.
    The European Commission ruled in 2004 that Microsoft used its Windows operating system, running on 95 percent of the world's computers and servers, to choke off competition from rival makers of server software and streaming media software.
    Microsoft challenged that decision, asking a special 13-judge Grand Chamber of the Court of First Instance to throw out the Commission's finding.
    It said the Commission is interfering with its right to design software as it sees fit.
    ''Essentially, the case asks two very important questions from Microsoft perspective. One is, under what circumstances can a company improves its products for consumers, add functionality to its products. And the other question essentially is, under what circumstances can a company be compelled to share its intellectual property, its innovations, with its direct competitors. And there are important questions, not just for Microsoft but obviously for companies in every industries,'' Tom Brookes, Microsoft spokesman, resumed.
    The court will hand down its ruling focusing on five aspects of the Commission's 2004 decision.
    First, the court rule decide whether to cut the 497 million euro fine the Commission imposed on Microsoft. Any change would have mostly symbolic value because the fine makes no difference to Microsoft's bottom line.
    Second, it will decide whether to overturn sanctions imposed on Microsoft for illegally bundling together its Windows Media Player with the Windows operating system.
    ''The Commission asks if the integration of media functionality into Windows meant that it pushed other media players out of the market. Now, obviously, since this case started back in 1998, I-tunes has happened, the I-pod has been hugely successful, Adobe Flash is in fact the largest installed-base media player , streaming media player in the world. That didn't even exist when this case started in 1998 so it's a very salient example of how much the market has changed and how much things have moved on,'' Brookes detailed.
    Microsoft was ordered to sell a version of Windows without Windows Media player, which it did. Few bought it.
    Third, it will decide whether the underlying decision itself on bundling was incorrect, which would automatically cancel the sanctions. The Commission found that Microsoft had bundled Windows Media Player to hurt such rivals as RealNetworks, which once dominated the field.
    Today media software is used for to watch Google's <GOOG.O> YouTube, download Apple <AAPL.O> iTunes or listen to Webcasts.
    Fourth, the court will decide whether to throw out sanctions requiring Microsoft to make its software run more smoothly with that of rival work group servers, the so-called "interoperability" issue.
    The Free Software Foundation is a lobby group ''dedicated to promoting computer users' rights to use, study, copy, modify, and redistribute computer programs'', its website indicates. Most members are software engineers and they promote the development and use of free software like the GNU operating system, used widely in its GNU/Linux variant.
    They have been advising the European Commission and says Microsoft should publish its communication standards so that new softwares could be created by independent software developers, increasing competition on the market.
    ''We have always made it clear that we don't want them to release any software, we don't want them to release any any source codes, something that they have you know copyright over. What we want is the specification, the standard, the communication used for communication between the desktop computers and the server computers,'' Ciaran O'Riordan (pronounce Kiran Reerdan), the Brussels representative of the Free Software Foundation, indicated.
    Independent Software developers will be watching Monday's decision closely.
    ''There are, there are hundreds of thousands of free software developers around the world and most large companies contribute in some way to free software development. So, the software has been developed to a point where it's equal with Microsoft in many respect, it surpasses it in some respects and it has to catch up still in others. But in general, we already got to the point of being being a viable alternative to Microsoft Windows,'' O'Riordan said.
    The judgement could have consequences for other industries. If the Commission's power is preserved, it can press ahead against Microsoft on a series of other pending complaints.
    Otherwise, it may have to back off from Microsoft.
    In addition, companies around the world are waiting to see if the court will cut into the Commission's power.
    In addition to the complaints on Microsoft, the Commission has pending antitrust cases and complaints involving Microsoft, Intel <INTC.O>, Qualcomm <QCOM.O>, Rambus <RMBS.O> and others.
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