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Back in court with the EC this week

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Microsoft is ready to comply with demands that it alters its Windows software in line with the ruling from the European Commission.

Microsoft legal eagle Brad Smith told Forbes magazine that Microsoft has spent millions of dollars preparing a version of Windows without Windows Media Player (WMP). He is still hopeful that the two sides can find a negotiated settlement. And he will argue that Microsoft would suffer irreparable damage if the EC stands by its earlier decision but said the company was ready to obey. He told Reuters: "We'll be ready to comply with whatever the court orders".

Microsoft is also preparing evidence that further opening up of server protocols would damage its intellectual property.

The case is due back in court on Thursday and Friday this week. Judge Bo Vesterdorf is expected to release judgement within the next two months. Vesterdorf can either insist that punishments and remedies should be applied immediately or should wait until after Microsoft's full appeal is heard - a process likely to take years.

No more air cover

In related news, Airbus is pulling out of supporting Microsoft's appeal against EC anti-trust action. The aircraft manufacturer filed in support of the software giant earlier this month.

MS welcomed the intervention by the aircraft manufacturer. Horatio Gutierrez, Microsoft's general counsel for Europe, said Airbus's decision was a significant event in the case and confirmed the software giant's claim that the court ruling would have negative effects beyond the software industry.

Microsoft is asking the Court of First Instance to put punishments on hold while it appeals the case. In March of this year Mario Monti and the Competition Commission ruled that Microsoft abused its "near monopoly" position. The EC imposed a record breaking fine of €497m. The software giant was also ordered to offer a version of Windows without Media Player and provide more open access to its server protocols.

Brad Smith, Microsoft's chief lawyer, told the Seattle Times that the firm still hopes to talk its way to a solution: "We think that these issues would best be resolved by a negotiated settlement." Microsoft will argue that the case would set a precedent that would damage European firms' ability to innovate. The firm will point to the success of Apple's iTunes service to prove there is competition in the market for digital music. The firm will also use the success of Linux to prove that it already provides enough access to its server protocols.

Microsoft has recently settled anti-trust cases with individual US states and legal action with Sun and Sendo. It is still under investigation by the Japanese Fair Trade Commission over allegations that its OEM licensing scheme is unfair. Microsoft also faces a class action suit from local governments in California and a $1bn claim from Real Networks, which alleges that the bundling of WMP into Windows undermined its business. ®

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