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Microsoft's EU anti-trust hearing begins

Tussle over interoperability, Media Player

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Microsoft will begin its defence at the EU's anti-trust hearing into the company's alleged anti-competitive practices in Brussels today.

Although Microsoft has settled anti-trust cases with US authorities, the changes imposed on the firm by the settlement have not satisfied the European Commission.

According to the most recent Commission statement on the matter, it feels the company has a case to answer on two issues. In the field of interoperability, the Commission claims that Microsoft is leveraging its "overwhelmingly dominant position" from the PC into low-end servers.

The Commission said it contacted a significant number of small, medium and large enterprises and requested information on whether interoperability considerations were a factor in their purchasing choices. An overwhelming majority of customers responding to this market enquiry highlighted that Microsoft's non-disclosure of interface information did indeed artificially alter their choice in favour of Microsoft's server products.

The other area of allegation surrounds the bundled Windows Media Player software. The Commission argues that the ubiquity of Windows Media Player on PCs artificially skews their development incentives in favour of Microsoft. The Commission said that the bundling of Windows Media Player with the Windows operating system weakens competition on merit, stifles product innovation, and ultimately reduces consumer choice.

Prior to the hearing, Microsoft has been issued with a confidential statement of charges. The Wall Street Journal says it has seen this document and reports that the EU alleges anti-competitive practices continued after settlement in the US case. The document is also said to outline possible fines and penalties, noting that Microsoft alleged non-cooperation could affect the penalty imposed. A fine could be up to &euro 2.7 billion, approx. 10 per cent of Microsoft's annual revenues.

The US settlement focused mainly on giving consumers the option to hide bundled Microsoft programs in favour of competing packages; the EU is not settling for this in the case of Media Player. Removing Media Player from Windows could be a costly exercise for Microsoft.

A decision on the case is expected early in the New Year.

© ENN

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