Microsoft Rivals Applaud European Court Ruling

 
 
By Darryl K. Taft  |  Posted 2007-09-17
 
 
 

For officials with RealNetworks and Red Hat, the decision by a European court to uphold the European Commissions findings against Microsoft was a longtime coming.

Both trumpeted the Sept. 17 ruling by the European Court of First Instance as a win for consumers who will be given greater choice in technology options now that Microsofts appeal was dismissed.

"The Court has confirmed that competition law prevents a monopolist from simply using its control of the market to lock in customers and stifle new competitors," Matthew Szulik, CEO of Red Hat, said in a prepared statement. Red Hat is based in Raleigh, N.C.

The European Commission found in 2004 that Microsoft, of Redmond, Wash., had abused its market dominance by making it difficult for its products to interoperate with those of its rivals, and by tying the Windows Media Player to the Windows operating system. The Commission ordered Microsoft to offer a version of Windows without the Media Player and also fined Microsoft $613 million.

The court upheld Commissions decision.

Read more here about the EU courts striking down of Microsofts appeal.

Szulik said interoperability information is "critically important and cannot simply be withheld to exclude all competition." One of the rulings in the case was that Microsoft must open up its communications protocols.

"Given Red Hats firm belief that competition, not questionable patent and trade secret claims, drives innovation and creates greater consumer value, we were pleased with the overall decision and look forward to examining the decision in greater detail," Szulik said.

RealNetworks, of Seattle, Wash., which had already gained from a related settlement two years ago, also praised the decision.

"We think the Court of First Instance was right to uphold the European Commissions conclusion that Microsoft cannot use its operating system monopoly to provide its applications with an unfair advantage," Bob Kimball, senior vice president of legal and business affairs and general counsel, said in a statement. "The standards affirmed by the European Court should help ensure fair competition for all Windows application developers."

Since the settlement with Microsoft in 2005, "Real has used the $761 million settlement proceeds to turbocharge the growth and diversification of our company," Kimball said.

Even though the companys namesake product is not bundled with Windows, the RealPlayer software averages more than 1 million downloads a day, he said. In May, RealNetworks released a new version of its application, which Kimball said was the first mainstream media player to offer one-click downloading and recording of Web-based video.

The Linux Foundation also praised the ruling.

"The Linux Foundation thinks the recent ruling by the EU court against Microsoft is a win for technology consumers. As consumers see the successes of open source and open standards, they are questioning yesterdays assumptions," Amanda McPherson, director of marketing for the Linux Foundation, told eWEEK. "Where once vendors could restrict customer opinions and treat interoperability as a threat to their monopolistic business practices, customers today want their vendors to compete on quality and innovation."

McPherson said the open-development model is a better way to distribute software.

"Especially in light of this legal ruling, Microsoft must come to grips with this new market environment and hopefully comply, not only with the EU, but with the demands of their customers for true open standards and open interoperability," she said.

However, not all the companies that pushed for restrictions against Microsoft were so forthcoming. A Sun Microsystems spokesman said the company was not commenting, but directed queries to the Software & Information Industry Association, of which Sun is a member. Adobe Systems also declined comment, as did other major industry players, such as Oracle and IBM.

Ken Wasch, president of the Washington-based SIIA, which lists not only Sun but Adobe, IBM and Oracle as members, told eWEEK he applauded the European court "for recognizing that while the computer and Internet industries have changed markedly in the past six years, the desktop hasnt. Its still a dead zone because Microsoft still has a vice grip that enables us to tie new technologies to their ubiquitous operating system. Microsofts failure to share critical technical information was recognized by the Court as an important element to their anti-competitive behavior."

To read more about what the EUs decision will mean for Microsoft, click here.

Jonathan Zuck, president of the Washington-based Association for Competitive Technology, told eWEEK the impact of the courts decision wont be known until the industry sees how Microsoft reacts to it.

"The regulators at DG Competition [the Competition Directorate General of the European Commission] seem to be taking this as a broad mandate to regulate the industry," he said. "I hope cooler heads prevail in the coming weeks because if competition regulators in Europe plan to design the software, set the prices and determine market share, theres not much left for the rest of us to do but pay our taxes."

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