Microsoft, seeking to stave off legal sanctions aimed at hindering its ability to dominate markets for desktop media players and server software, warned a European appeals court on Thursday that software developers and consumers would face dire consequences should it be penalized.
Speaking at the start of a two-day hearing before the European Court of First Instance, Microsoft's general counsel, Brad Smith, asked the court to delay until the end of the appeals process moves aimed at forcing the company to change its practices drastically. That process is expected to last at least two years.
The European Commission in March demanded that Microsoft share secret information about Windows to allow rivals to design products that can interoperate with its ubiquitous operating system; it also forced the company to sell a stripped-down version of its Windows operating system in Europe without its own media player.
"The path chosen by the European Commission is a path that will harm hundreds of European companies, thousands of European software developers, and millions of European consumers," Smith told journalists before the hearing. He also said the commission's penalties would "hinder innovation and slow economic growth, especially in Europe."
Judge Bo Vesterdorf, who is also president of the appeals court, is expected to rule within two months on whether Microsoft will have to comply with the sanctions during the appeals process.
In the court's largest hall, Vesterdorf listened as lawyers in white wigs sought to sway the outcome of the most drastic antitrust remedies ever imposed on the company, which according to the European Commission has more than 95 percent of the market for global desktop software and more than 40 percent of the market for work-group server software in Europe.
"The commission is attempting to redesign the structure of the company," said Ian Forrester, a lawyer with the Brussels office of the law firm of White & Case, which represents Microsoft. "This is the first time in history a company would be compelled to draw up a description of its secret technology and deliver it to competitors."
The hearing drew more than 100 lawyers to Luxembourg, many representing Microsoft's competitors, who sense a rare opportunity in Europe to break the software maker's stranglehold on desktop operating systems and halt its dominance in the software market for servers that link multiple personal computers.
Edward Black, president of the Computer and Communications Industry Association, a lobbying group in Washington that represents Verizon Communications, Nortel Networks, Sun MicroSystems, Oracle and others, said a decision against Microsoft could have major consequences, and not just in Europe.
"This is the leading front in an ongoing global debate over what constitutes intellectual property," said Black, whose association supports the sanctions against Microsoft. "If Microsoft loses here, the company for the very first time will be forced to significantly change the way it does business."
The hearing's first day focused on a single issue: whether Microsoft should be forced to disclose parts of its source code to competitors, who claim the failure to publish the information prevents competing server products from working as well as Microsoft's with desktop personal computers that run Windows.
Walter Moells, a lawyer repre-senting the European Commission, said the legal demand to share information is intended to prevent Microsoft from using its virtual monopoly in desktop systems to amass a similar dominance in the server market.
"The European Commission considers Microsoft's arguments to be long on speculation and short on fact," Moells said.
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