Commission and Microsoft fight court ‘battle of century’

By Peter Chapman

Date: 30/09/04

IT'S been dubbed the EU's legal battle of the century. Microsoft versus the European Commission kicks off in the European Court of First Instance (CFI) in Luxembourg today (30 September).

The hearings concern Microsoft's attempt to suspend the €497 million fines and remedies that the Commission ordered after it ruled that the software giant broke EU anti-trust law.

Microsoft, headed by Bill Gates, is applying for 'interim relief', pending the results of a full appeal against the Commission's rulings, a decision that could take several years.

Some of Europe's finest legal brains will sit before CFI President Bo Vesterdorf.

Representing the Commission is Richard Wainwright, an experienced advocate from the institution's legal service.

Wainwright, a keen runner, will need all his stamina to combat the agile brains of his Microsoft opponents - Brussels veterans Ian Forrester, a partner with White and Case, and Jean-François Bellis, of Van Bael & Bellis.

On Wainwright's side will be legal teams representing groups intervening in the case to ensure Microsoft is brought to book. These include RealNetworks - angry that Microsoft has shut it out of the market for multimedia software by bundling its own Media Player with Windows and Novell and the Computer and Communications Industry Association (CCIA), a group of companies opposed to Microsoft's operating system monopoly.

Real Networks will be backed by Antoine Winckler of US firm Cleary, Gottlieb, Steen & Hamilton.

The CCIA will be represented in court by James E. Flynn of Brick Court Chambers, advised by Thomas Vinje and his team from Clifford Chance.

Novell are represented by Christopher Thomas of Lovells, another British firm.

Vesterdorf can ask other experts to speak.

These include Microsoft's Brad Smith - a man with formidable experience of crossing swords with America's highest courts.

Despite the all-star cast, will the hearings live up to their court-room drama billing?

The stakes are huge. "But you can forget all that stuff about Ironside or LA Law," says a former Commission legal service advocate, referring to the classic legal TV series. "It is a learned discussion between lawyers."

The process will be driven by the questioning of Vesterdorf - described by one lawyer as "a straightforward Danish gent", who likes people to get to the point and has a penchant for interrupting rambling monologues.

Vesterdorf must weigh up the pros and cons of keeping the Commission's remedies in place. First, he must decide that Microsoft has a basic 'prima facie' case for staying the Commission's decision.

Second, he must be convinced that keeping the sanctions in place, pending a full appeal, would cause serious harm.

Finally, he must 'balance interests' not just of Microsoft, but of all the relevant stakeholders from competitors to consumers.

The Commission will argue that Microsoft must adhere to its ruling forcing the company to share computer codes to ensure Windows works well with computer'servers running other software.

It will also insist that the software giant must make available to companies versions of its Windows operating system stripped of the Media Player program.

Real Networks will attempt to show that Microsoft can easily remove Media Player from Windows without harming the functionality of the core product.

Also it will point to Microsoft's cash mountain to show that the company's financial future is not under threat.

Microsoft will argue that the suspension is vital because the long-term damage to its business model - including violation of its intellectual property rights - could never be undone even if it wins the full appeal.

It is expected to point to precedents where the court has issued similar suspensions, particularly the case of IMS Health, a company that was ordered by Brussels to share a clinical testing database with other medical firms. A final ruling on the suspension is expected by Christmas.

This week's events may not be the courtroom drama some journalists are craving. But even the old hands admit that their hearts will be thumping. "I expect it will be hugely busy and quite tense," says Forrester.

Article reports on the opening of the court case of Microsoft versus the European Commission before the Court of First Instance (CFI) on 30 September 2004.