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Message subject : European antitrust case and Microsoft

This message was posted by bill on August 03, 2000 :

The European Union opened an antitrust case against Microsoft Thursday, claiming it is abusing its market position in computer operating systems software to dominate the market.

THE EUROPEAN COMMISSION, the EU's executive arm, said its action followed a complaint from software rival Sun Microsystems.
Microsoft breached EU antitrust rules by engaging in discriminatory licensing and refusing to supply essential information on its Windows operating system, Sun said.

A district judge in Washington, D.C., already has ruled that Microsoft violated U.S. antitrust laws. Microsoft is appealing the order to split the software giant into two separate companies.

The EU has given Microsoft two months to reply to its case, and any formal decision is unlikely by the end of the year, said Amelia Torres, spokeswoman for EU Competition Commissioner Mario Monti.

If the EU finds there is antitrust abuse, the commission could levy a fine of up to 10 percent of a company's annual global sales. However, in practice fines have never exceeded 1 percent.

"The Commission hasn't come to any conclusions" but is taking the allegations of misconduct very seriously, she said.

If the EU finds there is antitrust abuse, “the Commission would take a formal decision which would be accompanied by fines,” she said.

Under EU rules, the Commission can fine a company up to 10 percent of its annual global sales. In practice, however, fines have never exceeded 1 percent.

The EU is looking into allegations “that Microsoft extended its dominance in the PC operating systems market to the server operating systems market.” That differs from the U.S. Justice Department antitrust case, which claimed Microsoft protected its dominance in PC operating systems through measures aimed at weakening Netscape Navigator and Sun’s Java system.

“We will not tolerate the extension of existing dominance into adjacent markets through the leveraging of market power by anticompetitive means,” Monti said in a statement. “All companies that want to do business in the European Union must play by its antitrust rules, and I’m determined to act for their rigorous enforcement.”

In February, the EU opened another case against Microsoft following complaints from competitors that it abused its dominant position. That case, involving Microsoft’s Windows 2000 software, is still being investigated.

Torres said the two cases might be merged if there is an overlap of the issues.

Sun Microsystems alleges that Microsoft’s near monopoly - it has a 95 percent share of the market for personal computer operating systems - “creates an obligation for Microsoft to disclose its interfaces to enable interoperability with non-Microsoft server software,” the EU said.

Microsoft refused Sun’s request for interface information in October 1998, which would have covered Window 95 and 98, NT 4.0 and all subsequent updates. Sun alleges the launch of Windows 2000 was the final step in Microsoft’s strategy to drive all serious competitors out of the server software market.

Sun also claims Microsoft “applied a policy of discriminatory licensing by distinguishing between its competitors according to a so-called ’friend-enemy’ scheme,” the EU says. The EU added that it received evidence that Microsoft did not meet requirements to “disclose sufficient interface information about its PC operating system.”

“The Commission believes that Microsoft gave information only on a partial and discriminatory basis to some competitors. It refused to supply interface information to competitors like Sun,” it said.

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