EU, Microsoft clash over monopoly ruling

BRUSSELS, Belgium (AP) — The European antitrust office and Microsoft Corp. clashed Thursday over whether last month's landmark ruling against the U.S. software giant would survive on appeal, in light of a new decision from the European Union's highest court that set strict guidelines for monopoly cases.

In its decision Thursday, the European Court of Justice spelled out three "exceptional circumstances" that must be met before a dominant company can be found guilty of breaking antitrust law for refusing to license copyrighted material to rivals.

Those circumstances were: if the refusal prevents the emergence of a new product or service for which there is a potential demand; if it has no "objective justification"; and if the license was so indispensable that withholding it could eliminate all competition in the relevant market.

Both the European Union and Microsoft said the decision supported their position.

"We believe that these exceptional circumstances as set out by the court ... have been met too in the Microsoft case," said European Commission spokeswoman Amelia Torres.

A Microsoft statement said: "We do not believe that the commission's case meets with the strict criteria laid out by the court."

The European Union last month slapped a 497 million euro ($596 million) fine on Microsoft for abusing its monopoly on computer operating systems. Its Windows software runs more than 90 percent of the world's personal computers.

Antitrust regulators ordered Microsoft to offer European computer makers a version of Windows stripped of its digital media player software for watching movies and listening to music, and to provide competitors in the low-end server market with more of its underlying software code so they can communicate with Windows-powered desktops as well as Microsoft's own products do.

Microsoft's appeal, expected in June, is expected to argue among other things that the order violates its intellectual property rights.

Observers said the EU high court's ruling Thursday was not breaking new ground but clarifying existing law — and that it would be up to the appeals court to decide.

"The question is, do the facts in the commission file support the case that this access to the proprietary information is absolutely essential?" said Stephen Kinsella, an antitrust expert at the Herbert Smith law firm in Brussels. "I think it's almost impossible to get a straight answer on that because the only people who have access to the file are those with a vested interest."

Microsoft said the existence of rival server products on the market was proof that it did not need to release more software code.

"It is clear from any view of the market that the Microsoft technologies concerned in the commission's case are not `indispensable,' in the terms of the court judgment, as competition is flourishing," the company's statement said.

Torres disagreed, arguing that the commission had compiled over five years "a considerable amount of evidence ... that interoperability with Windows is indispensable to compete."

She noted that Microsoft was not the first entrant in the market but quickly gained what the commission found to be a "dominant position" in workgroup server operating systems.

She also insisted the rivals were different in "many aspects," such as "reliability, speed, security."

"Thank God, we believe that in the case of Microsoft, we have intervened when there is still time to save competition in this market," she said.

The ruling from the EU's highest court involved U.S.-based IMS Health Inc., the world's biggest collector of pharmaceutical data, which had refused to license its methods to a competitor, citing copyright protection.

The Luxembourg-based EU high court said it was for the court in Germany that referred the case to decide whether the conditions had been met.

Screwing Microsoft Dept.: Maybe it's just me, but does anyone else think it's a little weird that the European Union jammed Microsoft with a fine of over half a billion dollars for business practices that have little to do with Europe and involve companies that are not European? Sounds like a money grab to me. A tax. Nobody seems to be defending Microsoft, but now is the obvious time to do so.
-- John Dvorak

http://www.pcmag.com/article2/0,1759,1575034,00.asp

Maybe it's just me, but does anyone else think it's a little weird that the European Union jammed Microsoft with a fine of over half a billion dollars for business practices that have little to do with Europe and involve companies that are not European?

I'm with you. I think that the EU is doing what they can to hurt free enterprise (particularly American) because they still haven't stopped their adulterous affair with that yellowed whore called Socialism. They shouldn't be allowed to sue Microsoft.

They shouldn't be allowed to sue Microsoft.

Aside from any merits of the case, the EU has every right to sue and fine a company doing business in the EU. If we thought Siemens (with 70,000 U.S. employees) was doing something illegal in the U.S., I think you would support the jurisdiction of the U.S. government.

You say, "aside from the merits of the case" when talking about the right of the EU to sue Microsoft, but I don't think that the two can be separated. My opinions on the matter are heavily influenced by the merits of the case, and everyone else's should be to.

I think that everyone would agree that litigation by foreign Governments involving companies that do business in their borders is acceptable - if the company is doing something illegal. What has Microsoft done that is "illegal?" Succeed in a free market? The EU is making charges against an American company that conflict with our values. You used Siemens as an example and I think that it's a great one. Imagine if the US sued Siemens because it was determined that they inflate prices by giving too much to employees. Imagine if we said that it's unacceptable for them to provide child care, high wages, health care, vacation pay, and so on to their employees. Such a suit would be against the values of the Europeans.

I don't think that the two can be separated.

They can very easily. For example, should that prosecutor be investigating Rush for doctor shopping? No. Does he have the legal authority to conduct an investigation and bring charges? Of course. Same here. Microsoft has operations within the EU's jurisdiction; therefore, the EU has the right to enforce its laws on Microsoft. If MS doesn't like it, they could always pull out of that market.

What Microsoft did at the time was an illegal leveraging of its monopoly power. Monopolies aren't illegal, only abuse of monopoly power is. Microsoft specifically used this power to drive other companies out of business, such as those manufacturing print servers.

My main problem is that the suit has little relevance anymore, as Real is about dead of its own mistakes (everybody includes a player with the OS these days) and Microsoft's APIs are better published now. However, they will be required to fully publish their APIs so that others can write systems that interoperate with Windows clients.

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