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US politicians go to bat for Microsoft

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Microsoft's lobbying of the Bush Administration to intervene on its behalf in its antitrust battle with the EU, is bearing fruit.

Yesterday, European competition commissioner Neelie Kroes said that representatives of the US government contacted her before she fined Microsoft $357.3m in July for non-compliance with the EU's landmark 2004 antitrust ruling. The unnamed officials, from the US embassy in Brussels, asked Kroes to be "nicer" to Microsoft.

In March 2004 The House of Representatives international relations committee wrote an open letter to then-commissioner Mario Monti, saying the anti-trust affair had been a US matter between US companies that had already been settled using US courts.

The State Department also reportedly engaged in an "off-the-record attempt to focus their attention" on the harm EU penalties could cause, while Senate and House of Representatives members waded in through speeches that warned of a looming trade war between the US and Europe.

Microsoft is an experienced political mover. The company spent $8.7m in 2005 greasing the Washington machine according to OpenSecrets.org, who records donations to campaigns of elected officials and candidates, and cash spent on lobbying. Microsoft beat all other software, hardware and telecoms companies, and was second only in spending to the US Telecom Association.

As in 2004, it seems the US government's latest lobbying on Microsoft's behalf has achieved nothing, as Kroes went ahead and imposed her fine anyway. According to Kroes the US government's move was "an intervention which cannot stand... like all companies great and small, Microsoft is not above the law".

Political pressure would appear to be the latest tactic in a broad campaign being used by Microsoft to reach a quick and favorable decision in its long running antitrust case with Europe. Last week, Kroes denied there was a vendetta against Microsoft, after one company partner published an open letter in the FT accusing the EU of "playing games" with Microsoft by raising concerns over bundling of security features with Windows Vista.

The letter followed Microsoft's request for more information about the EU's security concerns and the publication of a Microsoft-sponsored IDC report detailing the advantages in terms of jobs and taxes to European countries from Windows Vista. According to Kroes, "there appears to be a coordinated campaign to portray the Commission in a negative light." ®

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