Posted on 28-1-2004

'Negative decision' against Microsoft in antitrust case

Microsoft today restated its commitment to reaching an amicable resolution in a long-running antitrust dispute after the European commission reportedly
reached a negative preliminary decision against the software giant.
The company, which is feeling the heat as the five-year case moves towards a climax over the next few months, has played down the commission's reported ruling.

Press reports indicated that European antitrust regulators were moving ahead with plans to require Microsoft to separate its digital media-playing software from its ubiquitous Windows operating system.

Forcing Microsoft to "unbundle" its Windows Media Player software would be the toughest sanction against the company in its antitrust disputes in the US and in the EU. It would create a major headache for Microsoft, meaning that it would have to release different versions of Windows in the US and Europe.

However, Microsoft officials in Brussels insisted that the preliminary decision was always going to be negative.

"It did not come as too much of a shock," said a Microsoft official. "We fully expected the initial decision to be negative, but there is still a lot to play for - there are discussions going on all the time."

European authorities have taken a tougher line than their counterparts in the US, accusing Microsoft of using its quasi-monopoly in operating systems to ride roughshod over competitors providing alternatives for several applications, including media playing and server software which powers networks of computers.

By including the Windows Media Player with the operating system, which is carried by 95% of the world's personal computers, Microsoft enjoys a huge advantage over its rivals.

Competitors such as RealNetworks must rely on users downloading its software separately, or on manufacturers incorporating the software in new computers.

RealNetworks, which has testified in Microsoft's European hearings, recently sued the company for civil antitrust violations.

The EU case is heading towards a conclusion, and the commission has said that it hopes to wrap up the case before this summer, before a new commission president is named in June. Microsoft and commission officials have been holding settlement talks since November after a three-day hearing on the case.

If the commission judges Microsoft to be in violation of antitrust laws, the software company could be subject to fines, as well as being forced to remove software used to play back music and video from Windows.

Microsoft insists that the media-player software is an essential piece of Windows. It has said that it would challenge any decision that impinged upon its ability to add new features to Windows, including the media-player software.

The software giant is likely to challenge any negative ruling from the commission at the EU's court of first instance in Luxembourg.