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Expected EU ruling on Microsoft could set precedent

The company has said it will appeal

By Joris Evers and Marc Ferranti
March 19, 2004 12:00 PM ET

IDG News Service - With the breakdown of settlement talks between the European Union and Microsoft Corp., the stage is set for the EU to announce next week a series of antitrust remedies and declare the company an abusive monopolist, thus setting a precedent that will make it easier to prosecute other complaints, including several already under investigation.
The expected Wednesday announcement would close one chapter of a series of investigations that have been years in the making. However, a planned company appeal and other antitrust inquiries into the company's business practices mean that Microsoft could be dealing with antitrust issues in Europe for years to come.
Announcing the breakdown of settlement talks yesterday (see story), European Competition Commissioner Mario Monti said in a news conference that European regulators and Microsoft were unable to agree on commitments the company must make for future conduct.
"The public and competition would therefore be better served by a decision setting a strong legal precedent which establishes clear principles for a company that is so dominant in the market," he said.
European regulators will propose that the European Commission, the EU's executive body, issue a decision Wednesday on the case, which revolves around complaints that Microsoft abused its monopoly in desktop operating systems to stymie competitors in the media player and server software market.
Rivals Sun Microsystems Inc. and RealNetworks Inc., as well as the Computer & Communications Industry Association (CCIA), all said they look forward to a strong decision condemning Microsoft.
"Unfortunately, in and of itself, this ruling won't rein in Microsoft. However, it lays a foundation for other measures that could," said CCIA President and CEO Ed Black. "This ruling will set an important precedent. The fact that [Monti] is putting a high value on the precedent means that the commission intends to use it."
The CCIA filed a broad complaint against Microsoft with the commission in February 2003. A ruling against Microsoft next week would help the CCIA's case, Black said. "With formal precedents established and rulings made, it makes it a lot easier to accelerate other complaints," he said.
The ruling is expected to force Microsoft to sell two versions of Windows to PC makers in Europe: one with Media Player and one without, sources close to the case said. The commission is also expected to require Microsoft to share some Windows code with rivals. In addition, the European regulator will fine Microsoft between $123.9 million and $1.2 billion.
Microsoft's general counsel, Brad Smith, said the company will appeal the expected ruling but declined to say whether it will ask for a stay

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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