The New York Times The New York Times Technology November 5, 2002  

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Microsoft's U.S. Settlement Won't Clear Path in Europe

By PAUL MELLER

BRUSSELS, Nov. 4 — Last Friday's ruling in the settlement of the Justice Department's antitrust case against Microsoft forces the company to make more concessions than it has offered so far to the European Commission, which is also pursuing an antitrust action.

But the settlement in the United States, as endorsed by Judge Colleen Kollar-Kotelly of Federal District Court in Washington, will not easily serve as a template for resolving the case in Europe, officials here said today.

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"Our case is quite different from a factual point of view to the case in the United States," said Amelia Torres, the commission's spokeswoman on competition matters. She added, "We also have our own rules to uphold."

Even Microsoft agrees that the cases are too different to draw conclusions about the outcome of the lawsuit in Europe. A preliminary ruling is expected toward the end of the year.

"The law is different; the decision makers are different," Microsoft's associate general counsel for Europe, Middle East and Africa, Horacio E. Gutiérrez, said on Sunday.

Two of the requirements imposed on Microsoft by Judge Kollar-Kotelly go some way toward addressing the European Commission's main accusations against the company.

The United States ruling ordered Microsoft to divulge technical information to make it possible for rival software for servers — the computers that distribute data for business networks — to work as easily as Microsoft's own servers do with Windows, the nearly ubiquitous operating system on desktop computers.

The European Commission, the executive body of the European Union, has accused the company of withholding vital information from rivals to extend its dominance of computer operating systems into the market for server software.

In March, Microsoft went some way toward addressing the commission's accusation by offering to license the technology, embedded in its Windows operating systems, that computers use to operate together in a server network.

But last Friday's ruling in the United States pushes Microsoft to reveal more than the company offered the commission in March, said Thomas C. Vinje, a competition lawyer in the Brussels office of Morrison & Foerster and a spokesman for the Computer and Communications Industry Association, a trade group.

To ensure that rival server software will work well with Microsoft's, Mr. Vinje said, the company will also have to divulge details of the interface between servers.

"The ruling last week wouldn't satisfy the commission's objections with regard to disclosing technical details," Mr. Vinje said.

Another central plank in the European antitrust case is the accusation that Microsoft tied its audio and video playing software, Windows Media Player, to the operating system to give it an advantage over rival systems like RealNetworks' product, the RealOne Player.

Judge Kollar-Kotelly ruled that Microsoft must allow computer vendors to replace the icon for Microsoft products like Media Player with icons for rival products, like RealOne Player, on the Windows desktop — and that Microsoft must not retaliate against the vendors for doing that. But the ruling does not require that the software code itself for the Microsoft products be removed.

Some rivals, including RealNetworks, welcomed that part of the ruling. But Mr. Vinje said that provision would not restore a level playing field for audio-video software or for any other so-called middleware product on a computer's desktop.

"If developers of software that runs in conjunction with middleware products, such as audio players, know that Media Player is installed in all Windows packages," Mr. Vinje said, "then they will create applications for Media Player because they know their application will be accessible to over 90 percent of computer users.

"Even if the Media Player icon disappears from the desktop, Microsoft will still have an unfair advantage over rivals if the Media Player files remain in the computer."

In August last year, the commission said in its statement of objections against Microsoft that the result of ensuring a place for Media Player in the Windows operating systems "is a weakening of effective competition in the market, a reduction of consumer choice and less innovation."

Mr. Gutiérrez refused to say whether Microsoft would consider completely untying Media Player from Windows to address the European Commission's concerns. "It is premature at this time to speculate about case specifics and what may result from the proceedings in Brussels," he said.

If found guilty of abusing its dominant position with Windows, Microsoft would face a fine of up to 10 percent of its global sales generated during the year prior to the ruling.

Mr. Vinje said he expected the commission to stick to the facts highlighted in its statement of objections. He said: "Would the commission back down on the substance of the case? Only politics could do that."

The European commissioner for competition, Mario Monti, has received a battering in recent weeks. Two important merger prohibitions were overturned last month by Europe's second-highest court, the Court of First Instance. "Being overruled twice might weaken his resolve in the Microsoft case," Mr. Vinje said, "but I don't think so."





Europeans Unmoved by U.S. Proposal  (November 6, 2001)  $

TECHNOLOGY; Microsoft Denies It Tried to Hinder Inquiry  (October 11, 2001)  $

INTERNATIONAL BUSINESS; Across the Atlantic, the Microsoft Case Attracts Curiosity  (May 3, 2000)  $

TECHNOLOGY; Windows XP Update Is Set As a Part Of U.S. Deal  (August 28, 2002)  $



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