EU adds to Microsoft's legal woes

EU accues Microsoft of abusing market position.

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By  Peter Conmy Published  August 4, 2000

If Microsoft’s legal problems on the US home front were not enough, the European Union (EU) is now warning the company of monopolistic behaviour.

Yesterday, the EU warned the software giant that it believes the company is abusing its power to gain an edge in the global server software market.

The European governing body claimed it sent Microsoft a statement of objections “for allegedly abusing its dominant position in the market for PC operating systems software by leveraging this power into the market for server software.”

The EU’s case reflects an earlier investigation, launched in February at the initiative of the EU’s commission, into whether Microsoft had designed parts of its next generation operating system — Windows 2000 — to extend its dominance in PC operating systems, servers and then eventually e-commerce.

Anti-trust Rules

The commission took action only after Microsoft rival, Sun Microsystems made allegations that MS had breached EU anti-trust rules by discriminatory licensing and refusing to supply essential information on Win 2000.

Microsoft has two months to reply to the allegations and may request a hearing to field its side of the story.

However, it does not satisfy the commissions concerns Microsoft could be fined up to 10% of its worldwide revenue, although such a large fine has never been imposed.

According to the commission, Microsoft holds around 95% of the market for PC operating systems.

Those PCs using Microsoft software could only communicate with non-MS server systems if the software giant made available certain technical information to competitors producing those servers. Without such information, computers running on Windows operating systems would have to use Windows server software.

Copyright Protection

"We will not tolerate the extension of existing dominance into adjacent markets through the leveraging of market power by anticompetitive means and under the pretext of copyright protection," said EU competition commissioner Mario Monti.

Monti alluded to earlier complaints dating back to December 1998 and referred to earlier software packages such as Windows 95, 98, and NT 4.0 as well as Win 2000. The spokeswoman said the commission "cannot exclude that the two cases may be combined in the future," adding the sending of a statement of objections indicated the commission had "good evidence of misconduct."

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