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Day two: MS questions EC data

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MS v EC The second day of Microsoft's attempt to overturn the European Commission remedies heard a summing up of both sides on the tying of Windows Media Player - tomorrow we move onto interoperability.

Mr. Bellis, Microsoft's advocate, began by reiterating Microsoft's belief that its Media Player is not a separate product to its operating system. Bellis told the court the Commission had failed to prove there is demand for an operating system without a media player. He said the market had proved there was no demand for XPN, Windows without Media Player, and the Commission had failed to show any demand from OEMs at the time of the judgement in 2004.

He said the lack of price difference between Windows with, and without, Media Player was an inherent part of the remedy – media players are generally free so there should not be a price difference between the two versions. He described the Commission's actions as "It's unlike any other tying case. The action is an iconoclastic attempt to force a drastic change in Microsoft's business model."

Microsoft, with the help of its technical expert witness Will Poole, Microsoft VP, launched a strong attack on the Commission's claim that use of Windows Media Player increased rapidly after it was bundled with Windows. The Commission was accused of using data which excluded WMP version 6, and of ignoring data from outside Europe and the US.

Poole said: "We have discovered important errors at every stage."

The Commission began by quoting a US case which looked at surgery and anaesthetics. The Supreme Court found that the two were separate markets even though there was no demand for surgery without anaesthetic.

He said the integration of the Media Player with Windows in May 1999 was done for no technical or efficiency reason. Tying WMP to Windows provides better distribution, which will increase the likelihood of content providers settling on using Windows formats to stream media – because they can all but guarantee users will have the player on their PC.

He said this was confirmed by market data. He said Microsoft had adequate opportunity to dispute the data earlier in the hearing but had waited until now to do so.

Mr Flynn, for the interveners (supporters of the Commission case), began by addressing the two damning emails from Microsoft executives in 1997 and provided by Real Networks. These referred to repositioning the battle between Real Networks and Microsoft's then media player NetShow. The mails suggested the battle should be redefined as "Windows versus Real Player" rather than "NetShow versus Real Player". He said the Commission does not need to show exclusionary intent to succeed, but the evidence of intent did help.

Flynn said Media Player and Windows were clearly separate products. No code was integrated at the time of the bundling; "They slapped two products together and hid the uninstall function."

Court president Bo Vesterdorf warned attendees to prepare for the possibility the hearing may continue on Saturday morning.

Microsoft's legal chief, Brad Smith, speaking to reporters after the hearing, said: "The questions from the court today showed a deep understanding of the case. I'm pleased we could set the record straight on some areas of disagreement yesterday."®

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