Europe should accept US settlement, says Microsoft

The antitrust settlement now under consideration in the US should satisfy European Union competition regulators, Microsoft argues
Written by Matthew Broersma, Contributor

Microsoft is asking for European competition regulators to dismiss their investigation into the software company's business practices, arguing they should accept the settlement Microsoft has reached in the US antitrust case. In a confidential 102-page court filing obtained by the Associated Press, Microsoft said that "all of the areas" of Europe's investigation are covered by the US settlement, which has not yet been approved.

Critics have said that the US settlement will do nothing to limit Microsoft's monopolistic practices, which have already been ruled illegal. And EC officials have said that the investigation in Europe will continue, unaffected by Microsoft's settlement with the US Department of Justice.

Speaking at the beginning of November, Amelia Torres, spokesperson for competition policy at the EC, said the EC investigation is "factually and legally different (from the DoJ case)."

The document brought to light this week gives an insight into Microsoft's strategy for evading further legal sanctions, and also reveals the types of sanctions that the software giant would most like to avoid -- such as being forced to reveal more details about the workings of its Windows software.

The European Commission, the EU's executive body, is specifically investigating complaints that Microsoft is using its dominance in the desktop operating system market to compel adoption of its server software. Although Microsoft controls a large share of the server market, it has nowhere near the dominance it enjoys on the desktop.

The server market is crucial to the next stage of Microsoft's strategy, called .Net, which is designed to use Microsoft server technology as a standard Internet platform for authorising e-commerce transactions.

The investigation is also looking at Microsoft's practice of bundling multimedia software into the operating system, which could drive other multimedia companies out of the market. This aspect of the investigation is closer to the scope of the US case, which began with complaints about Microsoft's bundling its Internet Explorer browser with Windows.

The US settlement includes, among other provisions, a requirement that Microsoft disclose some technical details about how Windows servers work. Microsoft's lawyers in the filing urged the EU to consider the "extraordinary nature" of such requirements, arguing that "no other commercial software company operates under such strictures."

The document also says that any further disclosure of details about the inner workings of Windows would amount to a "sweeping remedy" that would let competitors easily "clone" Microsoft products.

Microsoft admitted that it has designed features into Windows that require the use of Microsoft software on both the client and the server, but said that this doesn't stop competitors from creating their own innovative features. "Microsoft's competitors are supposed to innovate on their own, not simply copy the work that Microsoft has done," said the statement.

Microsoft's lawyers charge that the EU should not depart from the US settlements. "The commission should be mindful of the benefits that come from consistent regulation of the subject by competition authorities around the world, and of the damage that can be caused by inconsistent regulation," the court document said.

Think it's all over? The antitrust case against Microsoft can still go back the to Court of Appeals, and then there's the European Commission's investigation... See ZDNet UK's DoJ/Microsoft News Section for the latest headlines.

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