Hear all, see all, say nothing: the Commission listens to Microsoft

Date: 06/11/03

Peter Chapman speaks to the woman with the unenviable task of refereeing next week's face-off between Microsoft and its anti-trust accusers in the European Commission. Hearing officer Karen Williams explains how she will ensure fair play - and why a round table can work wonders

THE European Commission's five-year anti-trust investigation into Microsoft is set to reach a climax next week when DG Competition watchdogs come face-to-face with the US software giant's defence attorneys.

For the legal world, it will be the only show in town. For those schooled in the minutiae of "vertical restraints" or "block exemptions", the hearings, as they are called, are just about the closest that DG Comp ever gets to LA Law or Ally McBeal.

But once the limos pull up outside the meeting room on 12 November, the hacks have shouted their pithy questions and the lawyers and executives have filtered their way in to the building, the outside world will be shut off.

So what happens inside? Karen Williams, the Commission hearing officer who will be chairing next week's proceedings, says the aim is to keep things low key and avoid a big courtroom style drama. The softly-softly approach even extends to the shape of the tables to be used during the deliberations. Williams prefers them to be round.

"These are the ones we use if we can," she says, "but we don't always have that facility."

Williams stresses that the hearings are not instigated by the Commission as a means to add fuel to its "statement of objections" - the legal document DG Comp sends to companies it believes may be breaching competition rules.

On the contrary, they provide the companies' representatives with an opportunity to put their case directly to their accusers, in person rather than in writing (although the tape recorder is switched on as soon as everyone is sitting comfortably and the oral evidence is transcribed).

"A hearing is part of the parties' rights of defence," explains Williams.

"It is an opportunity to develop arguments and to speak in front of various services of the Commission that are interested and representatives from national competition authorities."

But hearings don't just give the targets of an anti-trust case the chance to speak. Third parties, such as rival companies, can ask to be represented.

The Commission's answer depends on how relevant they believe any third party comments would be. "If they have sufficient interest in the case then they may be asked to participate," says Williams. "Ultimately it is the hearing officer's decision after consultation."

Third parties then have the opportunity to present their observations, normally after the main one has spoken.

Circumstances dictate how proceedings are wrapped up, and the "defendants" may be given the final word.

From the moment the motorcades depart, the Commission is free to "consider everything that has been said" to refine its case, says Williams, who reports directly to Competition Commissioner Mario Monti and is not a member of DG Competition - a distinction designed to foster impartiality.

There are no fixed deadlines for the next steps.

If Williams does her job properly, all parties will feel they have had a fair chance to get their point across.

Competition chief Monti spearheaded reforms to the hearing process to ensure just that, when he took over from Karel Van Miert in 1999.

Williams was appointed as one of the Commission's two hearing officers, along with Serge Durande, in October 2001.

Their role is not just a question of politesse. If they getit wrong, the Commission could see the European Court of First Instance (CFI) annul its decision on a case - the ultimate indignity for DG Competition, already battered and bruised from a series of recent court defeats.

Fiona Carlin, a partner with law firm Baker & McKenzie, says the stakes in cases like Microsoft are so high that the Commission is under enormous pressure to ensure it dots all its "i"s and crosses all its "t"s.

"It is a blow to its prestige and can represent a considerable drain on its resources to have any decision overturned by the CFI on the grounds that it has failed to adequately establish the facts or respect the parties' rights of defence.

"In a high-profile case that tests the boundary of EU competition law, it is critical for the Commission to get the procedure right so that the almost inevitable appeals process is focused on clarifying the core policy issues at stake."

Interview with Karen Williams, European Commission Hearing Officer, who will chair the anti-trust hearing between Microsoft's lawyers and the EC. The hearing is due to begin in the week commencing 10 November 2003.