EU unlikely to follow U.S. ruling on Microsoft

Microsoft, which expressed pleasure with District Court Judge Colleen Kollar-Kotelly’s antitrust ruling in the U.S. on Friday, is likely to be disappointed in its hopes that the U.S. ruling will set the tone for a similar ruling from European antitrust regulators, according to the software giant’s critics.

On Sunday, Microsoft’s associate general counsel for Europe, Middle East and Africa (EMEA), Horacio E. Gutiérrez said he hoped the European Commission uses the U.S. decision as “a reference point” as it works to resolve the case it began against the Redmond, Washington, company at the end of 1998.

Gutiérrez said he expects the Commission, the European Union executive body charged with policing competition in the 15-country block, to analyze the U.S. ruling closely, but he added that the situation is very different in Europe. “The law is different, the decision makers are different,” he said.

Last Friday’s decision “won’t change the dialog” between the software giant and the EU regulator. “Now we look forward to continuing that dialog,” Gutiérrez said.

Critics of Microsoft said that the European case is “fundamentally different” from the case Judge Kollar-Kotelly ruled on last Friday.

“Nothing in Kollar-Kotelly’s ruling relieves the European Commission of the need to pursue additional remedies,” said U.S.-based trade group, the Computer and Communications Industry Association (CCIA) in a statement on Monday.

The CCIA is primarily seeking non-discrimination in terms of access to Windows interfaces – the coding that allows the PC operating system to work with other devices such as computer servers.

The trade group also wants Microsoft to stop tying separate products to its Windows operating systems. The European Commission has accused the company of tying, or bundling, its Media Player software in with its Windows products, to the detriment of rival audio and video players such as RealNetworks’ RealOne Players.

The CCIA said Judge Kollar-Kotelly’s decision in no way impairs the European Commission’s antitying investigation. “The judge explicitly singled out tying issues for review by other legal proceedings,” the CCIA said.

A top commission competition official recently said he expects his office to be able to announce a preliminary ruling in the EU case by the end of this year, and a final conclusion early in 2003.

In the European Union, Microsoft is accused of having violated antitrust rules by using illegal practices to gain a dominant position in the market for low-end server operating systems through its influence on the market for personal computer operating systems.

The company is also accused of bundling some so-called middleware functions, such as its Media Player software, into Windows operating systems.

The European case is the result of two separate antitrust investigations into the software group. The first case was sparked by a complaint by Sun in 1998, alleging that Microsoft was using its Windows operating system software to muscle rivals out of the market for server software.

It focused on Microsoft’s reputedly discriminatory licensing practices and its refusal to supply software information to allow for the interoperability of rival server products with older versions of Microsoft’s Windows operating systems.

In February 2000, the Commission launched a separate investigation on its own initiative to see if Microsoft was doing the same thing with the latest version of its operating system software, Windows 2000.

As with the first case, the Commission believes that Microsoft may have withheld key interoperability information that vendors of alternative server software needed in order to allow their products to communicate with Microsoft’s dominant PC and server software products.

In August 2001, the EU regulator announced that it was merging the two cases because they were so similar.

In March this year, Microsoft said it was offering to give competitors access to some of the interoperability information, but rivals said it was not nearly enough to restore fair competition. The Commission has given no indication whether or not the offer goes far enough to overcome the EU’s concerns.

The EU declined to make any comment on the case, or on the way Judge Kollar-Kotelly’s ruling might affect it.