Microsoft – EC talks fail

Microsoft today confirmed that settlement negotiations with the European Commission have ended in deadlock. The company is dropping heavy hints that it will go to court to appeal any decision.

In the meantime, it will have to wait until 24 March when the Commission publishes its ruling on actions it must take as punishment for past anti-competitive behaviour.

In a statement today, Competition Mario Monti said the two sides had made "substantial progress towards resolving the problems which have arisen in the past but we were unable to agree on commitments for future conduct (our italics).

"In the end, I had do decide what was best for competition and consumers in Europe. I believe they will be better served with a decision that creates a strong precedent.

"It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position in the market."

In other words, the EC wants to reserve the right to take action against Microsoft over what it is doing today.

Consuming passions

In a rapid-fire response, Brad Smith, general counsel of Microsoft, said: "We have to ensure that the law is not just about competitors' complaints about the impact of new features. There needs to be consideration of the needs of consumers for new innovations. Consumers must be part of the equation. Perhaps the courts will provide the clarity that is necessary to resolve these issues. Today is just another step in what could be a long process."

The four-day talks were conducted "in a spirit of professionalism and cooperation but without a settlement", according to Microsoft. The company says it has tried in recent months to address EC concerns, with proposals to address interoperability issues and media player technology.

Microsoft is widely thought to have offered to place rival media players alongside its own software. Real Networks is sueing Microsoft for $1bn for allegedly shutting out Real's media player from PC vendors, by playing hardball over OEM contracts.

Now for a statement from Steve Ballmer, Microsoft's CEO: "I believe we reached agreement on the issues of the case. But we were unable to agree on principles for new issues that could arise in the future. We worked very hard to try to resolve these issues without litigation. Because of the tremendous value we attach to our relations with governments all across Europe, we made every possible effort to settle the case, and I hope that perhaps we can still settle the case at a later stage." ®

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