Microsoft rests its case in EU anti-trust hearings

AFP , BRUSSELS

Sun, Nov 16, 2003 - Page 11

Microsoft wrapped up its case Friday at the end of three days of EU anti-trust hearings which could have far-reaching consequences for the US software giant.

It said the closed-door hearings had made a "positive step towards a meaningful solution" to charges of its unfair market domination.

"It has been a constructive three days and our dialogue with others in the industry has been particularly helpful," it said in a statement after the end of the hearings, hosted by the European Commission in Brussels.

"In some areas we have identified opportunities to narrow the differences between us," it said, adding that as a market leader it had a responsibility to consumers, the industry and the Commission "to work things out."

"With this in mind, Microsoft came to Brussels with the intention of making progress in this case, and feels that the past three days represent a positive step towards a meaningful solution," it said.

Microsoft could be fined over US$3 billion and have to make substantial changes to how it markets its all-conquering Windows operating system if found guilty of using its dominance to crush rivals.

The software titan is accused of abusing the dominance of Windows -- which is installed in 90 percent of all personal computers (PCs) -- to fend off competing applications.

The EU hearings revolve around charges that Microsoft has tried to squelch rival products to its Windows Media Player, such as RealPlayer and Apple QuickTime.

Rivals of Bill Gates' Seattle-based titan appeared upbeat as the talks drew to a close, although talk of a possible compromise solution also remained in the air.

"We are very, very pleased," said Ed Black, head of the Computer and Communications Industry Association, which includes Oracle Corporation, Nokia, Sun Microsystems and others.

"The proceedings are extremely fair to Microsoft, but in spite of that we feel very confident about the outcome," he told reporters.

Rivals said Microsoft had struggled to convince the EU's competition commissioner Mario Monti.

"Microsoft's arguments sounded superficially good but we punctured their balloon very thoroughly. All the 30 parties have in their own way have devastated their arguments," said one source.

The source lashed out at Microsoft's hint that it would seek a compromise solution.

"We believe it's simply a smokescreen to hide the facts that they are loosing so badly they are trying to make it look better," he said.

Microsoft has also been accused of trying to squeeze out other firms in the market for "low-end servers" -- computers that provide e-mail and other services to multiple users.

The online media market is seen as one of the crucial growth areas that will shape the computer industry for years to come as more and more users venture into cyberspace to listen to music or watch films.

Control of the servers that provide such services would give Microsoft extraordinary additional clout to dictate terms to PC manufacturers.

The European Commission has said Microsoft must come up with "very convincing" arguments to head off an adverse judgement and the threat of fines.

The Commission has already detailed preliminary remedies that would require Microsoft to strip Media Player from Windows and reveal product secrets for its servers to rivals.

Fines of up to 10 percent of the company's global revenues could also be in the offing, equivalent to US$3.2 billion for Microsoft.