Microsoft and Commission wait on interim court ruling

By Peter Chapman

Date: 16/12/04

THE European Commission could be forced to make a partial settlement out of court with Microsoft if the European Court of First Instance (CFI) hands out an adverse ruling in the next few days.

That is the prediction from legal advisors to RealNetworks, Microsoft's last remaining opponent in the case, with the exception of the Commission.

Microsoft has already paid out huge sums to settle its differences with rivals, including Sun Microsystems, Novell and the CCIA, a group of companies that has fought Microsoft's monopoly in US courts for years.

As part of the settlements, Microsoft has promised to share code to make sure rivals' software works well with Windows, its operating system.

Bo Vesterdorf, the president of the CFI, has been asked by Microsoft to give it a temporary amnesty from the terms of the Commission's anti-trust ruling of March, pending the court's verdict on a full appeal, which is likely to take several years. The Danish judge's order could arrive as early as tomorrow (17 December), though experts said they expected a ruling next week.

A victory for Microsoft in its bid for interim relief would "give much more impetus to settlement discussions", said a senior advisor to RealNetworks.

Such a decision by the CFI would be a "large blow to the Commission's enforcement powers", he added. "It would put them under a lot of pressure - and would make it easier for them to settle."

A settlement would likely mirror the undertakings that Microsoft has made with its rivals. But it could deprive the Commission of its stated desire for legal precedents preventing similar abuses in the future.

But under the settlement scenario, the Commission could continue to fight separate parts of the case, pertaining to the way Microsoft 'tied' its Media Player software with Windows.

RealNetworks, which sells products similar to Media Player, maintains that Microsoft's practice of tying Media Player has made it harder to compete on a level playing field.

Despite the settlement speculation, lawyers acting for Microsoft and for rivals RealNetworks said the CFI ruling was too close to call.

But a senior advisor to Microsoft noted that EU legal history was against the firm based in Redmond, Washington State.

"Over 80% of applications for such interim measures are unsuccessful," he explained.

RealNetworks' legal team believes the CFI would find it difficult to justify letting Microsoft off the hook.

The fact that Microsoft has already agreed to share software code with its rival in the computer server sector, Sun Microsystems, should make it difficult for Microsoft to argue against similar requests in the Commission's order, the lawyers say.

And allowing Microsoft to wriggle out of its obligation to sell stripped-down versions of Windows could help "tip the market" towards Media Player, they add.

Commission competition spokesman Jonathan Todd said that it was too early to say what the EU executive would decide to do if Microsoft scored an early victory.

One option open to all 'losing sides' is to appeal against the interim measure verdict in the European Court of Justice.

"Theoretically, yes, it can be appealed at the Court of Justice," Todd said.

The Commission ruled in March that Microsoft must sell a stripped-down version of Windows to personal computer makers minus the Media Player code and that it must disclose information on the operating system to competitors.

It levied a record €497 million fine on Microsoft and ruled the company was abusing its 90% market share in personal computer operating systems to dominate markets for larger computers and media players.

Microsoft agreed earlier this month to pay €400m to end an anti-trust dispute with Novell and made peace with the CCIA trade group after more than ten years.

Article reports that according to legal advisors to RealNetworks, the European Commission could be forced to make a partial settlement out of court with Microsoft if the European Court of First Instance (CFI) hands out an adverse ruling. Microsoft has already paid out huge sums to settle its differences with rivals, including Sun Microsystems, Novell and the CCIA, a group of companies that has fought Microsoft's monopoly in US courts for years.

RealNetworks, which sells products similar to Media Player, maintained that Microsoft's practice of tying Media Player has made it harder to compete on a level playing field. The European Commission ruled in March 2004 that Microsoft must sell a stripped-down version of Windows to personal computer makers minus the Media Player code and that it must disclose information on the operating system to competitors. It levied a record €497 million fine on Microsoft and ruled the company was abusing its 90% market share in personal computer operating systems to dominate markets for larger computers and media players.