Re: [OT]Europe Supports Antitrust Ruling Against Microsoft
Pigeon wrote:
On Mon, Mar 15, 2004 at 08:25:48AM -0600, Hugo Vanwoerkom wrote:
http://www.nytimes.com/2004/03/15/business/16CND-TECH.html?hp
Arrgh. www.nytimes.com is one of those FOUL sites which requires you
to enter full details of any motoring convictions you have, your
family tree back to great-great-great-grandparents and how many times
a week you masturbate before it lets you read anything. Any chance of
posting a [link to a] summary?
March 15, 2004
Europe Supports Antitrust Ruling Against Microsoft
*By PAUL MELLER*
RUSSELS, March 15 ? Top antitrust regulators from the 15 nations in the
European Union gave unanimous backing today to a draft ruling by the
European Commission that officials say finds that Microsoft
abused its dominance in operating software.
A European Commission spokeswoman, Amelia Torres, said after a
closed-door session:
"The member states have unanimously backed the commission's draft
decision." She did not elaborate.
With today's backing, the clock on the five-year-old antitrust case
against Microsoft begins to run down. In less than two weeks, barring a
last-minute settlement, the European Commission is expected to declare
Microsoft an abusive monopolist, impose a fine of $100 million to $1
billion and order the company to make fundamental changes to the way it
sells software in Europe.
Such a ruling would be a significant setback for Microsoft after it
overcame its most serious legal challenge by settling a sweeping
antitrust case in the United States in 2001. And it would be the
defining moment in the five-year tenure of Mario Monti, Europe's top
antitrust regulator, whose term ends in the fall.
Microsoft has lobbied national governments in an effort to persuade
regulators to tone down the ruling of the European Commission, the
year-round administrative arm of the European Union.
But Microsoft's political influence is limited in Europe. The company
employs 12,000 people in Europe, the Middle East and Africa ? less than
a quarter of the 55,000 that General Electric
employed in the European Union when it was trying to win regulatory
approval of its planned acquisition of Honeywell International
for $45 billion. That deal was blocked by the commission in July 2001.
"G.E. didn't manage to win over the national regulators, so I doubt
Microsoft can," said Thomas Vinje, a competition and intellectual
property lawyer in Brussels and a vocal critic of Microsoft. His clients
include the Computer and Communications Industry Association, which has
played a prominent role in antitrust cases against Microsoft on both
sides of the Atlantic.
Even if Microsoft does find a sympathetic audience among the national
regulators, they are highly unlikely to demand changes to the
commission's proposed ruling, said Jacques Bourgeois, a longtime
competition lawyer in Brussels. "In my experience, I have never seen a
fundamental change to a draft ruling after one of these meetings," he
said. Mr. Bourgeois has no direct involvement in the Microsoft case.
Microsoft officials declined to comment on Monday's meeting. The company
has repeatedly said that it wants to reach an amicable solution with
European regulators. A settlement is possible any time before the
commission issues its final ruling, which could come as soon as March 24.
The greatest effect of a ruling against Microsoft would be evident in
the way the company sells its music and video-playing software program
Media Player. Instead of bundling the program into its Windows operating
system as Microsoft does now, the European Commission is expected to
demand that Microsoft sell two versions of Windows to manufacturers of
personal computers ? one of them with Media Player stripped out.
The commission has contended that by bundling Media Player into Windows,
Microsoft is abusing the dominance of the operating system to the
detriment of competitors like RealNetworks
and QuickTime.
"Media Player is an integral part in Microsoft's longer-term strategy
for Windows," a recent Goldman, Sachs
research note said. Microsoft, it said, "may refuse to settle, electing
to challenge this in court."
But a legal challenge, an appeal at the European Court of First Instance
in Luxembourg, would take at least three years to conclude. In the
meantime, the court may turn down a request to suspend the changes
ordered by the commission until after the appeal, forcing the company to
alter the way it does business in Europe.
Windows software generated sales of $3.4 billion in Western Europe in
2002, nearly 30 percent of worldwide sales, according to an estimate by
a research company, the International Data Corporation. (Microsoft does
not break out sales figures by region.)
Microsoft lawyers have said that any legal remedy imposed on its
operations in Europe might be extended to all Windows programs in all
regions, including the United States. Yet some analysts point to recent
indications that Microsoft could tailor a version of its software for
Europe.
Dan Kusnetzky of International Data said Microsoft recently introduced a
version of Windows specifically for the Thai market.
"Microsoft may be trying to gain expertise in building a granular
version of Windows ahead of the European ruling," he said. "The impact
of the European ruling could be limited to Europe until the rest of the
world demands something similar."
Ordering Microsoft to sell two separate versions of Windows to PC
manufacturers would restore competition to the audio and video software
market only if the version without Media Player were sold at a discount,
analysts and lawyers said. "Pricing is one of the components that must
be considered if the ruling is to have any effect," Mr. Kusnetzky said.
A person close to the case said that the commission could not dictate
the prices of the different versions.
But the draft ruling orders that Microsoft "must not do anything which
would make a bundled version of Windows more attractive to PC makers
than an unbundled one," this person said.
In addition to the bundling question, the commission also wants to force
Microsoft to share enough Windows secret code to allow rivals to design
server software that works as smoothly with Windows as Microsoft's own
server software. Servers connect networks of personal computers. A
Microsoft competitor in this market, Sun Microsystems
complained to the European Commission in 1998 that it was unable to
compete fairly with Microsoft because it did not have the necessary
information about Windows to make its products work properly with
Windows on individual computers.
"We spend millions of dollars trying to reverse-engineer Windows so as
to allow our server software to work with it," said Lee Patch, Sun's
vice president for legal affairs.
The commission is expected to order Microsoft to propose what computer
code information should be disclosed to allow rivals' software to work
with Windows. The settlement with the Justice Department also has a
software licensing provision, although some competitors have complained
that Microsoft's conditions are prohibitive.
According to a person who has seen the draft ruling, Microsoft would
have to report back to the commission with concrete proposals within two
or three months. The regulator would then consult competitors including
Sun to see if the information Microsoft offered was enough to make rival
server software interoperable with Windows.
Microsoft is more likely to agree to the commission's demands concerning
this second matter, and there is already a precedent.
In 1984, I.B.M.
ended a four-year investigation by the European Commission by agreeing
to license certain interface information to competitors in Europe. "The
I.B.M. solution was a good solution for its time," Mr. Patch of Sun
Microsystems said. "It's not far removed from what we're after, but time
is running out for Microsoft to reach a similar settlement now."
Copyright 2004
York Times Company <http://www.nytco.com/> | Home
Reply to: