Even as Microsoft defended itself Wednesday against charges that it is trying to corner the media player and server markets, new trouble was brewing for its Windows XP.
BRUSSELS, Belgium (AP)Even as Microsoft Corp. defended itself
Wednesday against charges that it is trying to corner the media
player and server markets, new trouble was brewing for its Windows
In a potential new front in Microsofts long-running battle with
regulators, European Union antitrust officials are pursuing charges
from rivals that the latest desktop operating system is designed to
help extend Microsofts dominance into new markets such as instant
messaging, e-mail and hand-held devices like mobile phones.
Following up a complaint filed in February, the European
Commission has sent fact-finding letters to "market participants"
about the allegations, sources close to the situation said,
speaking on condition of anonymity. The move indicates the
complaint is being taken seriously.
A Microsoft spokeswoman refused to comment, but the company
dismissed it as "nothing new" when it was filed earlier this year
by Microsoft competitors including Sun Microsystems Inc., Oracle
Corp. and Nokia Corp.
Commission spokeswoman Amelia Torres also refused to comment,
but did say that such letters are a "normal" part of its
"The Commission may indeed be looking into other subjects,"
she said, "but that is totally separate" from the nearly
5-year-old case that reached a new level Wednesday with the start
of a three-day, closed-door hearing.
A cavalcade of Microsoft lawyers faced off with competitors, EU
regulators and observers from the 15 EU governments as well as the
U.S. Department of Justice, which settled its own antitrust case
against Microsoft in 2001.
U.S. and EU officials often work closely on cases of mutual
Microsoft entered the hearings expressing optimism that it could
still reach a settlement.
"Hope springs eternal," said Brad Smith, Microsofts senior
vice president for law and corporate affairs. The hearing is
"another opportunity to continue our discussion" with European
officials, he said.
After a brief Commission presentation, Microsoft launched into
what is scheduled to be a day and a half of testimony, including
PowerPoint presentations that even a Microsoft ally, Jonathan Zuck
of the Association for Competitive Technology, called
"stultifying" by lunchtime.
The hearing ended Wednesday evening. Tom Burt, Microsofts
deputy general counsel, said he thought the presentations went
Microsoft said the companys technical and economic experts
presented information on server operating systems and multimedia
playback technologies, and "provided context around existing
consumer choice and interoperability in the marketplace."
The company reiterated that it remained open toward working with
"It was a nice fancy presentation. I dont think there was
anything terribly new," said Ed Black, head of the Computer and
Communications Industry Association, a trade group critical of
EU officials also say a settlement is still possible, but
Microsoft is under pressure to offer more concessions.
Microsoft faces charges that it is illegally trying to extend
its Windows operating system dominance into the market for servers,
which tie desktop computers together, as well as into so-called
media players, which play music and video on computers.
The Commission warned in August it was prepared to levy
potentially hefty fines for past misconduct and demand its own
remedies, such as forcing Microsoft to remove its built-in Media
Player from Windows or to include rival players as well.
The company also may have to disclose more software code to
competitors in the server market.
The European Commission is expected to issue its decision in the
case next springunless a settlement is reached.
Microsofts main concern is defending its long-standing practice
of keeping Windows on top by incorporating new features in the
operating systemwhich it sees as benefiting consumers and rivals
view as unfair competition.
Its next generation of Windows, code-named Longhorn, will have a
built-in search engine that could threaten Google, Yahoo! and other
The Media Player dispute echoes the browser war in the United
States, in which a court found Microsoft guilty of monopolistic
practices to crush rival Netscape. Microsoft eventually reached a
settlement with the Bush administration that allowed it to keep
Internet Explorer in Windows, but had to allow computer companies
to add competing products as well.
A U.S. appeals court is reviewing whether the settlement
adequately protects consumers and competitors.
What makes the Windows XP case so threatening to Microsoft is
that the rivals want European regulators to split up the company.
In the United States, a proposed breakup of the company was thrown
out on appeal.
Microsoft shares rose 18 cents to close at $25.98 on the Nasdaq
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