Microsoft accuses EU of interfering with market forces

Posted on 26 Apr 2006 at 16:17

Microsoft has accused the EU of interfering with market forces on the third day of its appeal against 2004's antitrust ruling.

Microsoft lawyer Ian Forrester told the 13 judges in Europe's second-highest court that the company's activities had been entirely legal and that the EU's penalties were an 'attempt to reconfigure [how the] market works by handicapping the leading player in perpetuity'.

The company was found guilty of using the dominance of its Windows operating system to force other firms out of media player and server software markets. It was heavily fined, ordered to produce a stripped-down version of Windows without the Media Player software and release information on interoperability with the OS.

Per Hellstrom, lawyer for the European Commission, argued that the case is 'of vital importance for innovation'.

'Microsoft cannot be allowed to decide who can innovate and who cannot,' he said, adding that the company's dominant market position means that it can exclude any other company by blocking access to its own technologies.

But Judge John Cook questioned the motives behind the EU's position.

'Is it correct to (say) that Microsoft's action was necessarily abusive?' he asked.

Hellstrom replied that the firm should have sold Windows Media Player as a separate application, putting it on a level playing field with rival software such as Real Player.

Although the EU and Microsoft remain at loggerheads, they did agree on one point yesterday: that the stripped-down Windows has been a failure, with only 2,000 copies in circulation.

Hellstrom suggested that this may be because it was the same price as the full version of Windows and hinted that the commission may amend its ruling to force a price cut.

Microsoft's lead-lawyer argued that since media player software is free, a price differential would make no sense and such an imposition would be 'unbelievable'.

Jonathan Zuck, president of the Association for Competitive Technology, which is backing Microsoft, also rubbished the suggestion.

'The Commission might now be entertaining the notion that Microsoft might have to bribe consumers to buy an inferior product,' he said.

Author: Simon Aughton