Microsoft Readies Appeal in Europe
Microsoft Corp. could spend the remainder of the decade embroiled in a European legal battle over its trade practices, but the events of the next 90 days could prove critical in determining the impact of the case.
If Microsofts request to stay, pending appeal, a European Commission order to unbundle Media Player from Windows and disclose more interfaces is successful, it means business as usual for the software maker throughout the appeal. The rapid pace of change in the software industry could ultimately make the EC order moot, insiders said.
If the stay is rejected, however, Microsoft will have 90 days to deliver a version of Windows without Media Player and 120 days to disclose interface information so rival servers can interoperate with Microsoft products.
Microsoft contends that the unbundling would "break" Windows and cause a number of applications and Web sites to function improperly, said Brad Smith, Microsoft general counsel. Officials also charged that interface disclosures could violate intellectual property rights and stifle innovation.
Microsofts plans to request a stay and appeal are the latest moves in a five-year investigation. The EC ruled last week that Microsoft uses its "near monopoly" in the desktop operating system market to create an illegal advantage in related markets. In addition to the orders, Europe imposed a fine of about $600 million on the Redmond, Wash., company.
Some users said they view the unbundling requirement as having little immediate impact on the competitive landscape but predicted the interface disclosure could cause considerable change.
"If enforced successfully, this would allow systems to compete on technical and financial merits rather than on which will work with the secret sauce," said Grant Johnson, senior programmer/ analyst for Time Warner Cable Inc., in Charlotte, N.C.
Microsoft CEO Steve Ballmer held out hope last week that the company could reach a settlement with Europe, much like it did with the United States after court review. In the United States, the court rejected calls to force the unbundling of middleware from the operating system and instead ordered Microsoft to let OEMs hide user access to the companys middleware. The commonwealth of Massachusetts has appealed.
While the United States ultimately chose to focus narrowly on remedying the specific harm caused by Microsofts illegal conduct, Europe chose a remedy to discourage future conduct of a similar nature, antitrust experts said.
"It has been found in every court that Microsoft is monopolistic," said Gary Sanchez, owner of CareerPro Inc., an employment counseling company in Campbell, Calif. "The U.S. regulators, the [Department of Justice] went away after giving Microsoft a sweetheart deal when a new administration came along. The [EC] is showing the U.S. how that should be done."