Tuesday, March 16, 2004

EU Brands Microsoft an Abusive Monopolist, Sets Stage for Final Ruling

EU Brands Microsoft an Abusive Monopolist, Sets Stage for Final Ruling: " The ratification of the draft ruling means that the clock is now ticking for Microsoft. Unless the company can negotiate a last-minute settlement of the 5-year-old antitrust case, the Commission will soon fine Microsoft between $100 million and $1 billion; the company could also face a set of procedural and behavioral remedies that could have sweeping ramifications on the way it does business around the world. The Commission could finalize the draft ruling as soon as next week, after a second meeting at which the EU representatives will determine the size of the fine to levy against Microsoft.
Most at risk for Microsoft is its sweeping digital-media strategy, which hinges on the inclusion of Windows Media Player (WMP) and other related technologies in the company's dominant Windows products. The Commission is expected to ask Microsoft to sell a version of Windows that doesn't include WMP or to offer competing products, such as Apple Computer's iTunes and RealNetworks' RealPlayer, on the Windows CD-ROM that ships at retail and with new PCs. Microsoft has strongly fought both strategies and suggested instead that PC makers could ship a 'must-carry' CD-ROM with their systems, separate from Windows, that includes competitive products. The Commission rejected that proposal last month.
Nevertheless, the Commission has a bargaining chip that wasn't available to US courts. Although Microsoft is expected to appeal any negative verdict, the company isn't automatically entitled to an appeal. The European Court of Justice could reject the appeal because a 3-year delay would make the ruling inconsequential, given the rapidly changing business climate. For the court to reject an appeal, however, the Commission's case has to be strongly researched and decisively written. Predictably, European antitrust regulators have been working toward that goal for the past several months."

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