Microsoft Corp and EU regulators will square off in the EU's second highest court today over a fine of nearly half a billion euros (US$600 million) that the bloc imposed on the software giant seven years ago.
Microsoft, which is refusing to pay the fine, has requested the five-day trial at the Luxembourg-based European Court of First Instance in hope of getting the penalty annulled or at least reduced.
The European Commission -- the EU's executive arm -- slapped a fine of US$612 million on Microsoft in March 2004 for abusing its dominant market position.
The European competition watchdog also ordered Microsoft to sell a version of its widely-used Windows operating system unbundled from its Media Player software and to divulge information on its operating system needed by makers of rival products.
The company has spared no effort to mobilize an army of lawyers, computer experts and advisors in hope of convincing the 13 judges hearing the case that the fine is unjustified.
The commission remains confident its anti-trust ruling is firmly grounded.
After years of failure to resolve the dispute, both sides have huge stakes riding on the judges' decision, which is not expected until the end of this year at the very earliest.
For Microsoft, a defeat would not only mean that the company cannot wiggle out of the fine but would also seriously compromise its long-standing claim that its business practices do not thwart competition.
If the commission were to lose the case, its authority as Europe's top competition regulator would be seriously undermined.
Microsoft is eager to present the case as more than just getting the fine reduced.
"At issue are whether companies can improve their products by developing new features and whether a successful company must hand over its valuable intellectual property to competitors," Microsoft said in a statement ahead of the trial.
"There is healthy competition and interoperability in all the markets covered in this case and we will bring those facts to the court next week," it added.
But European Competition Commissioner Neelie Kroes refuses to be intimidated. On Saturday she said she was "confident" that the EU would prevail because it had "good arguments."
Both sides can count on various industry associations to support their positions at the court in Luxembourg.
"Failure to uphold this commission decision will allow Microsoft to continue these anti-competitive practices ... in the markets addressed in the current case and would open the way for an extension of the monopoly into new areas," said the chairman of anti-Microsoft industry body ECIS, Simon Awde.
In direct contrast, the head of the pro-Microsoft ACT, a trade group for small- to medium-sized tech firms, warned that nothing less than companies' ability to innovate effectively was at stake if Microsoft did not prevail.
"If the court upholds the commission's case, Microsoft can't continue to innovate. And this creates a bad environment for people who depend on innovation in that platform and an environment that's not conducive to innovation in Europe," the ACT's Jonathan Zuck said.
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