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Thu, Nov 11, 2004 - Page 12 News List

EC vows to pursue Microsoft for abusing its position

THE GUARDIAN , LONDON

The European Commission (EC), which fined Microsoft a record 497 million euros (US$625.50 million) this year for abusing its dominant position, on Monday vowed to continue pursuing the US software group through the courts for anti-competitive behavior.

The comments came as Microsoft shareholders approved plans to hand back US$32 billion to investors through a one-off special dividend of US$3 a share. The dividend was approved a day after Microsoft for the first time put a figure on its outstanding legal liabilities from the monopoly abuse cases of the 1990s, capping them at US$950 million.

EC officials were scathing about Microsoft's alleged efforts to "buy the silence" of rivals. On Monday it reached a US$536 million settlement with software maker Novell, and a ceasefire with the US Computer and Communications Industry Association (CCIA). As part of the settlements, both withdrew from the Brussels case.

Sources said it was "insulting the intelligence" of the European court of justice to suggest, via Brad Smith, Microsoft's general counsel, that there was less need to pursue litigation when the group's rivals apart from RealNetworks had settled. "Competition rules don't exist to defend the interests of this or that competitor but to ensure there is genuine competition in the market-place which benefits consumers," they said. "With an estimated cash pile of US$64 billion Microsoft will see the cost of these settlements as derisory."

The European court of first instance is due this month to rule on Microsoft's request for a freeze on the EC's "remedies," which include ordering it to offer a version of its Windows operating system without MediaPlayer, following a fractious two-day hearing in September.

Microsoft announced plans to hand back a large amount of cash to investors in July. It was reluctant to commit its growing cash balance until the long-running suits were resolved.

It laid the US government case against it to rest in the agreement with the CCIA and has been steadily settling the remaining cases. The trade body was the only remaining interested party trying to force a supreme court review of Microsoft's settlement with the justice department.

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