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Microsoft ruling may not bolster Europe's new case, warns lawyer

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A landmark court ruling which last year backed the European Commission's last competition action against Microsoft may not be as helpful in its current action as has been widely thought, according to a competition lawyer.

The commission's 2004 decision to fine Microsoft €497m was backed by the Court of the First Instance of the European Communities (CFI) and the judgment is widely regarded as having strengthened the commission's hand for cases it has subsequently launched.

But an analysis of the decision by competition lawyer Adrian Wood of Pinsent Masons, the law firm behind OUT-LAW.COM, found that the case offers fewer comforts to the commission than many have assumed.

"There is still no real consensus on what [the Microsoft ruling] tells us for the future," Wood told OUT-LAW Radio. "The ability to have some form of over-arching broad set of principles was lost a little bit and so in that sense there is a disappointment there. We did not get crisp, clear, practical pointers for generic use."

The commission has begun competition cases against Intel, Qualcomm, and a new action against Microsoft in recent months, moves that have been seen as a reflection of its post-ruling confidence. But Wood said it ought not to rely too heavily on a judgment seen by some as flawed.

"In terms of the bundling of media player to the Windows environment the CFI took on board all of the commission's arguments without question," said Wood. "I think there were certain elements of the judgment where the commission is going to hesitate somewhat before relying fully on [it] as a way for going forward."

The new investigation into Microsoft will look into whether it is legal for a company with its market dominance to include web browser Internet Explorer with its Windows operating system. It will also look at whether the operating system allows for enough interoperability with other companies' software.

The case was sparked by a complaint from competing browser maker Opera. That company's chief executive Jon von Tetchzner told OUT-LAW Radio that he has every confidence that the previous Microsoft case is a positive precedent that he thinks will be followed.

"I think there are similarities. This is in some ways a very similar case to the recent [one]," he said. "I think if anything the browser case is even clearer. I do believe there are similarities. We are expecting good results out of this."

The two cases are similar: both involve questions of the interoperability of the Windows system and both rest on the legality of software bundling. The previous case hinged on the bundling of a media player with the system, the new case on the inclusion of a web browser.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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