Microsoft's dispute with EC set to drag on

Microsoft’s antitrust dispute with the European Commission looks likely to drag on after the last minute failure of talks between the two last week, paving the way for the EC to impose heavy sanctions on the company.

  • E-Mail
By  Peter Branton Published  March 21, 2004

Microsoft’s antitrust dispute with the European Commission looks likely to drag on after the last minute failure of talks between the two last week, paving the way for the EC to impose heavy sanctions on the company. These could affect development of future Microsoft operating systems such as its much-hyped Longhorn OS, expected sometime around 2006. The dispute centres on Microsoft’s bundling of its Media Player software with its Windows XP operating system. While Microsoft has contended that stripping Media Player out of the OS would affect its performance, competitors complained that Microsoft’s dominant position in the OS market gave it a monopoly advantage in the fast-growing media player market. The EC has ruled against Microsoft and will announce the action it requires the company to take on March 24. “A settlement to the Microsoft case has not been possible,” EU Competition Commissioner Mario Monti said in a statement. “In the end I had to decide what was best for competition and consumers in Europe. I believe they will be better served with a decision that creates a strong precedent. It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position in the market.” Microsoft pulled out all the stops to make a last-minute settlement with CEO Steve Ballmer flying to Europe for talks with Monti. While Microsoft offered to allow competing media player software to be placed on a PC’s hard drive during the installation of Windows, the EC wants the company to offer two distinct versions of Windows. The EC is likely to demand that Microsoft now does this, as well as possibly demanding that Microsoft opens its proprietary Windows source code to competitors. It could also impose a fine of anything up to 10% of Microsoft’s turnover, which could amount to billions of dollars. However, in its own statement Microsoft suggested that it is far from conceding that the case is over. “We made every possible effort to settle the case, and I hope that perhaps we can still settle the case at a later stage,” Ballmer said. “Today is just another step in what could be a long process,” added Microsoft senior vice president and general counsel Brad Smith. An appeal would take several years to conclude and Microsoft will almost certainly request that any remedies be suspended until it is heard. The EC will probably refuse this, which could mean different versions of XP being made available. Microsoft has said that as part of its commitment to offering the same products globally that any changes to its European operations will affect the software it sells in other regions of the world. As part of the EMEA region, the Middle East is thus highly likely to be affected by any ruling.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code