TELECOM Digest OnLine - Sorted: Microsoft Claims Breakthrough in EU Fines Hearing

Microsoft Claims Breakthrough in EU Fines Hearing

Sabina Zawadski & Darren Ennis (
Fri, 31 Mar 2006 13:14:17 -0600

By Sabina Zawadzki and Darren Ennis

Microsoft's top lawyer said on Friday there had been a breakthrough in
the U.S. software company's dispute with the European Commission at a
hearing into antitrust fines ordered by Brussels.

"As I said in the hearing, I believe that we have had a breakthrough,"
Brad Smith told reporters at the end of the two-day hearing into the
Commission's plan to start fining Microsoft 2 million euros ($2.4
million) a day.

The EU's executive, which accuses Microsoft of blocking competition by
witholding information on its business software, said it would take
its time before deciding whether to proceed with the fines.

"We will take into account what was said at the hearing and the
documents submitted before we make a decision," Commission spokesman
Jonathan Todd said. "It will take several weeks."

Smith gave little indication of why the company considered there had
been a breakthrough, but he said Microsoft now had "greater clarity"
on the antitrust case, helping to bring about a solution.

Some rivals of Microsoft said they had heard nothing new from the
software giant at the closed-door hearing, run by independent

Thomas Vinje, lawyer for the European Committee for Interoperable
Systems which groups companies such as IBM and Oracle, told reporters
earlier in the day that Microsoft's defense was "still not good

Microsoft spent most of Thursday presenting its case.


The Commission, which acts as Europe's top antitrust body, found in
2004 that Microsoft abused its dominance of its Windows operating
system to muscle competitors out of the market.

It fined Microsoft almost half a billion euros and ordered it to share
information with rivals so they can make server software that runs as
smoothly with Windows as Microsoft's own.

Despite 12,000 pages of documentation that Microsoft has submitted
spelling out how its software works, the Commission says rivals still
did not have the right information and it wants to fine the company
until it complies.

Microsoft has previously said it has not only complied with the
demands, but it is willing to do more.

The case has already raised some U.S. political concerns.

In a letter seen by Reuters on Thursday, the U.S. mission in Brussels
urged the Commission to treat Microsoft fairly and said the company's
claims of unfair treatment, "are of substantial concern to the United
States" if accurate.

Microsoft has accused the Commission of denying it access to documents
it says it needs to defend itself against the fines.

Commission spokesman Todd played down the importance of the letter and
said Microsoft's antitrust case was not raised when senior European
Union and U.S. competition officials met in Washington on Thursday.

Microsoft is not without its supporters.

On Thursday, six companies including Norwegian digital broadcast
system maker Tandberg Television said Microsoft's documents were
useful and helpful.

The Association for Competitive Technology, which represents more than
3,000 information technology companies including eBay , said the
Commission's demands were unreasonable.

"As a software engineer with 12 years of experience ... I know that
search for perfect documentation is a search for the Holy Grail," said
ACT's president, Mike Sax.

"It is equally true that perfect documentation has never been
necessary to create interoperable software," he said.

Microsoft has also offered parts of its vital source code for work
group servers as well as 500 hours of free technical support from
Microsoft engineers to software developers.

Independent legal analysts say it looks as if the Commission will
impose the fines on Microsoft and have called the hearing set-piece
theater merely airing old arguments.

Copyright 2006 Reuters Limited.

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