Final chance for Microsoft to head off EU anti-trust findings
12/11/2003 11:56
Microsoft gets a last chance this week to persuade EU anti-trust investigators that it has not sought to crush fair competition in the European software market.
The European Commission is holding an oral hearing from Wednesday to Friday in which Microsoft and rival companies will get to plead their case.
For competitors, the investigation by the European Union's executive arm presents their final serious chance to get at the Seattle-based titan.
Bill Gates' company secured a settlement with the US Justice Department in November 2001 that was condemned by other firms as inadequate. Appeals against the settlement are drawing to a close.
The European Commission has said Microsoft must come up with "very convincing" arguments to head off an adverse judgement and the threat of fines.
The Commission has issued no less than three "statements of objections" since launching a probe into alleged monopolistic practices by Microsoft in Europe in February 2000.
This week's hearings will revolve around charges that Microsoft has tried to squelch rivals to its Windows Media Player and in the market for "low-end servers" -- computers that provide e-mail and other services to multiple users.
A final decision by the Commission in the Microsoft case is unlikely before early 2004, sources say.
Microsoft goes into the hearings in battling mood, having last month submitted a "robust response" to the Commission's third statement of objections issued in August.
In a statement Monday, the company said it had provided "extensive evidence to illustrate that significant consumer choice exists in the server operating systems and digital media markets today".
It said rival companies were "in no way" prevented from interoperating with Windows servers, and that its actions "have been pro-competitive and have resulted in products that offer great benefits to European consumers".
From the anti-Microsoft camp, the Computer and Communications Industry Association Tuesday ridiculed what it said was the company's likely defence case -- that it acts as a "benevolent monopoly".
The US association said there was little doubt that the Commission would find against Microsoft.
"Therefore, as in the past the Microsoft strategy will be to try to make sure that any remedies imposed by the European Commission are diluted to the point where they pose no real threat to Microsoft's continuing use of its monopoly power...," it said.
The Commission has already detailed preliminary remedies that would require Microsoft to strip Media Player from the Windows operating system and reveal product secrets for its servers to rivals.
Fines of up to 10 percent of the company's global revenues could also be in the offing. Microsoft could therefore be forced to stump up 3.2 billion dollars to the EU, after posting revenues of 32.19 billion dollars in
However, past EU fines against companies accused of monopolistic practices have ranged from 0.1 percent to just over 1.0 percent of the firm's revenues.
The European Commission is holding an oral hearing from Wednesday to Friday in which Microsoft and rival companies will get to plead their case.
For competitors, the investigation by the European Union's executive arm presents their final serious chance to get at the Seattle-based titan.
Bill Gates' company secured a settlement with the US Justice Department in November 2001 that was condemned by other firms as inadequate. Appeals against the settlement are drawing to a close.
The European Commission has said Microsoft must come up with "very convincing" arguments to head off an adverse judgement and the threat of fines.
The Commission has issued no less than three "statements of objections" since launching a probe into alleged monopolistic practices by Microsoft in Europe in February 2000.
This week's hearings will revolve around charges that Microsoft has tried to squelch rivals to its Windows Media Player and in the market for "low-end servers" -- computers that provide e-mail and other services to multiple users.
A final decision by the Commission in the Microsoft case is unlikely before early 2004, sources say.
Microsoft goes into the hearings in battling mood, having last month submitted a "robust response" to the Commission's third statement of objections issued in August.
In a statement Monday, the company said it had provided "extensive evidence to illustrate that significant consumer choice exists in the server operating systems and digital media markets today".
It said rival companies were "in no way" prevented from interoperating with Windows servers, and that its actions "have been pro-competitive and have resulted in products that offer great benefits to European consumers".
From the anti-Microsoft camp, the Computer and Communications Industry Association Tuesday ridiculed what it said was the company's likely defence case -- that it acts as a "benevolent monopoly".
The US association said there was little doubt that the Commission would find against Microsoft.
"Therefore, as in the past the Microsoft strategy will be to try to make sure that any remedies imposed by the European Commission are diluted to the point where they pose no real threat to Microsoft's continuing use of its monopoly power...," it said.
The Commission has already detailed preliminary remedies that would require Microsoft to strip Media Player from the Windows operating system and reveal product secrets for its servers to rivals.
Fines of up to 10 percent of the company's global revenues could also be in the offing. Microsoft could therefore be forced to stump up 3.2 billion dollars to the EU, after posting revenues of 32.19 billion dollars in
However, past EU fines against companies accused of monopolistic practices have ranged from 0.1 percent to just over 1.0 percent of the firm's revenues.
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