European Union Opens Antitrust Cases Against Microsoft

Just
when Microsoft [NASDAQ:MSFT] thought its legal woes were winding
down, the European Union (EU) has launched another major antitrust case
against the software giant.

And, as with earlier EU antitrust cases, Microsoft is once against
accused of abusing its power in the marketplace.

The EU today informed Microsoft that it was allegedly abusing its
market position in computer operating systems software to dominate
the market for server software.

In a press statement, the EU said its action followed a complaint from
Sun Microsystems that "Microsoft breached EU antitrust rules by
engaging in discriminatory licensing and by refusing to supply
essential information on its Windows operating system."

Microsoft has said it is confident of winning its position, and is
making all available resources and records available to EU officials.

The EU, meanwhile, says its initial research is now complete, and
Microsoft has two months to formally respond to the allegations,
unless, of course, it asks for additional time.

EU officials were at pains today to stress that Microsoft has not been
found guilty, but has been formally asked to respond to the
allegations and the EU's preliminary investigations.

John Frank, Microsoft EMEA director of law and corporate affairs, said
that Sun's complaint is based on the firm's desire to gain access to
Microsoft's technical trade secrets.

"We will find positive resolution to this matter," he said, adding
that Microsoft has a long history of actively developing and
implementing support for hundreds of industry standards across its
product line and encourages the use of these standards to ensure
interoperability of systems for its customers.

Frank added that the firm doesn't believe the law requires Microsoft
to share its secrets with direct competitors.

The potential penalties for Microsoft are huge, Newsbytes notes, as
the EU can fine the software giant up to 10 percent of global revenues
if it finds the complaint substantiated. Legal experts say that, even
in the worst case a fine is unlikely to exceed 1 percent of the
firm's annual revenues.

In a statement, Microsoft said it had received the EU's statement of
objections, and plans to contest the action, saying it "makes its
application programming interface (API) broadly available and in fact
encourages their broad distribution and use in the industry."

In the statement, Microsoft said it understood the complaint was made
by Sun Microsystems back in December, 1998.

Frank said that Microsoft is disappointed by Sun's continued effort to
use government intervention to overcome the fact that Microsoft's
products are outperforming theirs in the marketplace, and for one-
third of the cost.

Frank went on to say that the complaint is another step in a long,
legal process.

"As always, we remain confident that, once the Commission has had
a chance to review the information we will provide, we will find
positive resolution to this matter," he said.

Jean-Phillipe Courtois, president of Microsoft EMEA, meanwhile, said
that Microsoft has the strongest line-up of server products in the
company's history.

"The performance of Windows 2000 is already making great strides
into an area where Sun is strongest. In a way, the fact that they feel a
need to fight the product battle with legal intervention, is the best
proof point we have of the real value our products bring to market," he
said.

Microsoft's Web site is at http://www.microsoft.com.

Reported by Newsbytes.com, http://www.newsbytes.com.