EC says Microsoft probe goes on

The European Commission's investigation into Microsoft's embedding of Media Player continues regardless of its settlement in the US courts
Written by Matt Loney, Contributor

The European Commission's antitrust case against Microsoft will continue, unaffected by the software giant's settlement with the US Department of Justice last week, according to EC officials.

"This investigation will continue," said Amelia Torres, spokesperson for competition policy at the EC. "It is factually and legally different (from the DoJ case)." Torres said that Microsoft is expected to organise a preliminary oral hearing for its case, adding that if this does happen, "it will probably be before Christmas."

In Europe, Microsoft stands accused of abusing its dominant position in violation of Article 82 of the EU Treaty. Like the US Sherman Antitrust Act, under which the DoJ prosecuted Microsoft, Article 82 of the EU Treaty prohibits the manipulation of a dominant position in one market to gain a competitive advantage in another market.

The EC's action is aimed at "anticompetitive" actions taken by Microsoft to use its dominance in the desktop operating system market to improve its position in the server software market. Microsoft is also accused of using its dominance in the low-end server market to quell competition in that market. In August, the EC issued a new Statement of Objection, expanding its investigation of Microsoft to look into whether it is illegally tying its Media Player to its Windows operating system.

At the oral hearing, Microsoft will have the opportunity to challenge any facts or legal analysis contained in the Statement of Objections issued in August and earlier. It can do this by presenting oral statements and by presenting witnesses such as economists, technical experts and customers to address key issues.

Before that hearing, Microsoft is expected to reply to the charges made against it in the EC's Statement of Objections published at the end of August. Microsoft had originally been given two months to reply, but requested and was granted an extension to the deadline. The EC has not divulged the new deadline, but Torres confirmed that it runs out in time for a pre-Christmas hearing.

And once the hearing is complete, the Commission will prepare a draft decision, which will discussed with the member states' competition enforcement authorities. The member states will be able to influence the decision, but the Commission is not obliged to accept their opinion.

All this could take until mid-2002 to complete, at which time, once the process has been reviewed by the Commission and by its legal service, Microsoft could face a fine of up to 10 percent of its annual revenue and/or obligations of conduct.

Some think that events in the DoJ/Microsoft case could strengthen the EC's position. The US-based Computer & Communications Industry Association is an official intervener in the EC's case against Microsoft. Although the CCIA was not available to comment following the settlement in the US, it recently released a statement saying it felt that the US Court of Appeals decision in June, which found Microsoft guilty of breaking competition law on eight counts, could help. "The Court (of Appeal)'s confirmation that Microsoft has monopoly power in the market for Intel-based PC operating systems mirrors the Commission's conclusion that Microsoft has such a monopoly," said the CCIA, adding: "The court's confirmation that Microsoft illegally comingled the code of its Windows operating system and its Internet Explorer browser supports the Commission's finding of illegal tying under Article 82 of Windows Media Player with the Windows operating system."

The CCIA represents a number of large technology companies, including Yahoo!, Nokia, AOL Time Warner, Fujitsu and Sun Microsystems.

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