Consumers lose if Monti gets his way, says Microsoft lawyer

Date: 25/04/02

By Peter Chapman

MICROSOFT'S top lawyer says Mario Monti risks totally fragmenting the world market for computer programs and technology - to the detriment of consumers and industry alike.

The warning from Brad Smith, the company's general counsel, comes as the EU trust-buster homes-in on allegations that Microsoft has abused its dominant position in the market for PC software to boost its server business.

Speaking to European Voice, Smith said it would be a 'huge step backwards' if Monti imposed changes on the way the company packages its software that conflicts with a final ruling expected soon in the US.

'We will have a clear ruling one way or another [in the US] and if the EU were to take a different approach to product integration issues it could create confusion for what today is a global technology market,' said Smith.

'A fragmentation is something that would be adverse for both the industry and consumers. It would by definition raise costs - which I think it is fair to say would lead to the risk of higher prices.'

He added: 'It would certainly add inefficiency to the market place but more than that it would add confusion to computer users - especially in an age where people can download software from the internet.'

US District Court Judge Colleen Kollar-Kotelly is expected to rule shortly on the validity of Microsoft's settlement last year with the Department of Justice.

This focused on the way the firm integrated other products into its dominant Windows operating system.

The EU's case has mainly focused on the lack of interoperability between Windows and computer servers running software made by other rivals.

But the risk of a conflicting ruling increased when Monti warned Microsoft about the way it had integrated its Media Player software with Windows.

Smith urged Monti and EU authorities to work together to ensure this situation was averted, adding that both sides must make use of the transatlantic 'positive comity' agreement on anti-trust cooperation.

'Certainly in the wake of the GE Honeywell case, we hope we can provide information to governments on both sides of the Atlantic,' Smith said, 'and we hope the law will continue to evolve in a manner that ensures consistent treatment of technology products in Europe and the United States.'

But Smith did not rule out the possibility of Microsoft offering more concessions to appease the Commission.

'We have always been clear that if there is an opportunity to resolve the case in a constructive and reasonable way we would look forward to that,' said Smith. 'By definition negotiation involves discussion and give-and-take on both sides.'

In March it promised to make computer code available on an encryption language and an internet file system. But critics dismissed the move as meaningless and said it failed to address the Media Player issue at all.