| Author (Person) | Mallinder, Lorraine |
|---|---|
| Series Title | European Voice |
| Series Details | 13.09.07 |
| Publication Date | 13/09/2007 |
| Content Type | News |
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The most controversial anti-trust case in EU history is reaching its climax. Lorraine Mallinder reports. On Monday 17 September, the Danish judge Bo Vesterdorf, on his last day of work at the European Court of First Instance, will rule on Microsoft’s appeal against a 2004 Commission decision to limit the company’s allegedly anti-competitive business practices. It comes after a decade or more of bitter battling between the world’s most powerful IT firm and its rivals, which include IBM and Oracle. It will offer - to an as yet unknown extent - clarity, but may well be inconclusive. The prevailing wisdom suggests a mixed outcome, which justifies the Commission’s demands that Microsoft share its source code with rivals, but stops short of condoning demands that the company offer a version of Windows without Windows Media Player. Much attention will be focused on whether the court decides to reduce the fine levied on the company in 2004, at €497 million Europe’s largest antitrust penalty, but of all the complex outcomes emerging from the ruling, it will be the least pertinent. Thomas Vinje, who represents ECIS (the European Committee for Interoperable Systems), a group of Microsoft’s rivals, describes the fine as "a parking ticket" for Microsoft. "It’s the behaviour that matters," he says. "The fines haven’t affected Microsoft’s behaviour at all." In the hours after the judgment, battalions of lawyers will pore over the details on both of the main areas, known as interoperability and bundling, extracting the complex technicalities and overriding principles that will support their favoured reading of the court’s conclusions. Speaking on condition of anonymity, one industry insider from ECIS explains that the Commission may lose on technicalities, but win on the fundamental theory. He fears, however, that potential gains will get mowed down by Microsoft’s public relations machine. "On our side there are very competent people and prestigious law firms," he says. "But what Microsoft does is to overpower the opposite camp with as many resources as they can." The temptation is to characterise the case as a David v Goliath type battle, but ECIS is a hard-nosed grouping with substantial clout. Carlo Piana, of the developers’ collective FSFE (the Free Software Foundation Europe), criticises the decisions by some key ECIS members to withdraw from the battle after receiving pay-offs from Microsoft. RealNetworks received $761 million in October 2005, partly to resolve all of its antitrust disputes with Microsoft worldwide. Sun Microsystems, which in 1998 lodged the antitrust complaint that started the whole chain of events leading to next week’s judgement, received a $700m settlement from Microsoft. Piana questions the pay-offs. "It’s borderline," he says. "You can have private issues and resolve them. But serving as an intervener is about more than representing your interests." So, where next? Mario Monti, the former competition commissioner who issued the 2004 ruling, spurned prior attempts by Microsoft to reach a settlement, opting instead for legal clarity. Thus far, his successor, Neelie Kroes, has stood firm on compliance with the ruling, but will she want to take the fight any further if any of its main tenets are undermined? For Microsoft’s part, Erich Anderson, associate general counsel for the company’s European division, takes a conciliatory stance. "We basically have two options," he says. "We can sit down and have a constructive discussion or we can litigate the thing. The unfortunate part of that is we’ll never move forward because litigation is about looking backwards." Time line
Who’s who
Nationality: Spanish Age: 50 The man who started it all. Madero led the case against Microsoft in 1999-2006 while working for the technology unit of DG Competition. His reputedly boundless energy helped turn an allegedly routine inquiry about Microsoft’s practices into what has become the biggest antitrust investigation in European history. He was one of a team of talented officials, including UK economist Nick Banasevic, the only remaining member of the original investigation team. Before joining the Commission in 1997, he worked for five years at Banco Bilbao (BB) in Spain. Last year, he transferred to DG Competition’s financial services unit.
Nationality: Joint US and Belgian of Norwegian origin Age: 53 The thorn in Microsoft’s side. Vinje has been leading the industry charge against Microsoft for the past eight years, first of all as a representative of CCIA (the Computer & Communications Industry Association) and later for ECIS (the European Committee for Interoperable Systems). Quietly-spoken with a relaxed manner, he has in the past been described as a master of rhetoric who excels at boiling complex arguments down to the bare bones, but the easy-going, almost casual demeanour is deceptive. Vinje is a heavyweight who argues on matters of substance. He was instrumental in persuading the Commission to fine Microsoft €497m in 2004 for abuse of its near monopoly of the Windows PC operating system. He has been a partner in the Brussels office of multinational law firm Clifford Chance since 2004.
Nationality: Italian Age: 39 The freedom fighter. Piana is a Milan-based tech lawyer who has been the main legal representative of developers’ collective FSFE (the Free Software Foundation Europe) since 2004, when Microsoft appealed against the Commission’s remedies on bundling and interoperability. Dwarfed by Microsoft’s financial and legal clout, the non-profit campaign group has still managed to carve out its niche in the high-profile battle with technical expertise, tenacity and some evangelical zeal. Piana was an advocate of the open-source and free software movement before joining FSFE, but that would not have prepared him for the sheer intensity of the case. In a high-stakes game full of cagey players, his statements have been refreshingly candid. Explaining his decision to introduce to the court Andrew Prigell (left), the colourful creator of a piece of software known as Samba, at last year’s Microsoft appeal hearing, he said: "I don’t want a hired gun, I want a real person." Piana is a partner at law firm Tamos Piana & Partners.
Nationality: Danish Age: 61 The superstar judge. Vesterdorf, who heads Europe’s top appeals court, has said that he will retire on the same day that the Microsoft judgement is announced. He is the longest serving judge of the European Court of First Instance, which he helped to set up in 1989 and has presided over since 1998. He once harboured ambitions to become a jazz musician and worked as a stagehand for the Danish National Symphony Orchestra. He dealt major blows to the Commission’s competition department in 2002, when the court overturned three merger approvals in the space of five months. Pundits predict that he might again square up to the Brussels executive but Microsoft insiders remain jittery, remembering the court’s rejection of the company’s plea for a stay of the remedies demanded by the Commission in 2004. Whatever the outcome, Vesterdorf will be going out with a bang.
Nationality: Belgian Age: 58 Microsoft’s lead lawyer on the bundling issue. Bellis is himself something of a Brussels legal institution, involved since 1975 in a number of landmark competition cases. He is a founding partner of boutique law firm Van Bael & Bellis. A contrarian by nature, Bellis has described his firm, one of the last independents in the business, as ‘the last of the Mohicans’. Known for being an excellent listener and a clear and effective communicator, he neatly summed up arguments in favour of bundling with the shoes and laces analogy: selling shoes with laces, he asserts, should not necessarily kill the market for laces.
Nationality: UK Age: 62 Microsoft’s lead lawyer on interoperability issues. Like Bellis, Forrester is a Brussels insider. He co-founded law firm Forrester & Norall in the early 1980s, which subsequently became Forrester Norall & Sutton and merged with White & Case in 1998. In the mid-1990s, he used to write a fortnightly column for European Voice’s business pages. A ferocious worker, he has developed a reputation as an assiduous challenger of the European Commission for which, ironically, his wife works as a jurist. A native of Scotland, he is an elder at St Andrew’s Church of Scotland in Brussels.
Nationality: US Age: 48 The legal face of Microsoft. As the polished frontman of the world’s most powerful IT company, Smith could not be anything less than impeccable. The perfection comes with a friendly smile, a deft human touch and a disarming cheerfulness. Smith comes with a message to deliver, that of Microsoft as an open, sharing and co-operative entity on a lifetime learning experience. Under Smith’s mellow watch, the company has adopted a forward-looking ethos, opting whenever possible for negotiated solutions. Litigation, in Microsoft’s book, is all about looking backwards. Frustratingly for Microsoft-bashers, Smith, who joined the company in 1993, working on legal issues in Europe before being appointed general counsel in 2002, is a genuinely likeable person. Like everyone else in this game, however, he is razor-sharp, focused and determined to win. The most controversial anti-trust case in EU history is reaching its climax. Lorraine Mallinder reports. |
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