LUXEMBOURG: EU hearing opens on Microsoft antitrust challenge to the European Commission

Record ID: 452049

  • Title: LUXEMBOURG: EU hearing opens on Microsoft antitrust challenge to the European Commission
  • Date: 25th April 2006
  • Summary: SCANNING MACHINES FOR BAGS, BRAD SMITH, GENERAL COUNSEL FOR MICROSOFT IN BACKGROUND
  • Embargoed: 10th May 2006 13:00
  • Keywords:
  • Location: Luxembourg
  • Country: Luxembourg
  • Topics: Legal System
  • Reuters ID: LVA13V0RE3ZPIGXL49CEFR89MQ5I
  • Story Text: A special 13-judge court opened a high-stakes hearing on Monday (April 24) to decide if it should curtail the European Commission's role as an antitrust watchdog or endorse forcing software giant Microsoft to change its business practices.
    "The court is now in session," Bo Vesterdorf, president of the Court of First Instance, said as he convened the session in Luxembourg.
    He was followed immediately by Microsoft lawyer Jean-Francois Bellis, who began presenting the company's case about audiovisual software.
    "I will show that the Commission erred," Bellis said.
    The Commission, the executive arm of the European Union, found in 2004 that Microsoft had abused a virtual monopoly in its Windows operating system to muscle out rivals.
    It imposed a record 497 million euro ($613 million) fine and ordered Microsoft to change the way it sells software.
    Microsoft challenged that decision before the Court of First Instance, the European Union's second-highest court.
    The court is holding the five-day hearing before its rarely used Grand Chamber of 13 judges in its largest courtroom, where all 215 seats are spoken for.
    So many reporters are covering the hearing that most must watch it on television in an overflow room, with only 15 admitted to the court.
    The first two days will be devoted to a review of the Commission's decision that Microsoft acted illegally by integrating audiovisual software into Windows, found on more than 90 percent of personal computers worldwide.
    On Wednesday and Thursday, the judges will hear Microsoft's challenge against the Commission's finding that the firm deliberately withheld information from rival makers of work group servers, so their software would not work as well as Microsoft's own.
    Work group servers are used for printing, file-access and sign-on functions. Microsoft's share of the market has climbed steadily since it began competing illegally, the Commission said.
    "The objective of this decision is to ensure that Microsoft's competitors can develop products that interoperate with the Windows (operating system) ... and viably compete," the Commission said about the interoperability function.
    Microsoft says it acted legally, that others can compete fairly and the court should throw out the Commission decision.
    "We think the facts will show that there is strong competition and consumer choice," Microsoft general counsel Brad Smith told reporters before entering the court.
    "The impact of this case goes far beyond Microsoft. The ability to innovate is important to the success of any company and for the economic success of any country."
    If Microsoft prevails, Brussels' authority for any future action against the company will be in tatters.
    The Commission's power as Europe's premier competition regulator took a beating in three court reversals in smaller cases. Another defeat would inflict a huge blow on its prestige.
    A decision in this case is not expected for months, possibly a year.
    While the hearing was getting under way in Luxembourg, Microsoft Chief Executive Steve Ballmer was set to meet in Brussels with EU Information Society Commissioner Viviane Reding.
    A spokesman for Reding said the talks were unrelated to the hearing. ($1=.8102 euro)
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