Microsoft delivered a devastating critique on Monday of the European commission’s ruling that it abuses its dominance of global software, accusing Brussels of foisting on consumers a version of Windows without its media player function that nobody wanted — and nobody had bought.
As the company appealed against the commission’s 2004 decision to fine Microsoft a record â,¬497-million, its lawyers accused the EU regulator of being economically illiterate, presenting flawed market analyses and ignoring all the evidence of healthy and growing competition from the likes of Apple and Google.
But the commission hit back, claiming that the world’s largest technology group was hell-bent on extending its global monopoly in desktop operating systems into new areas such as search engines and security, and accusing it of squeezing out rivals and stifling innovation.
Rival hi-tech firms backing Brussels presented secret Microsoft e-mails from 1997 between Bill Gates, its founder, and executives outlining a concerted strategy to wipe out its rival Real Networks from the streaming video and music market just as Microsoft toppled Netscape, replacing it with its own Internet Explorer, which now has a 90% market share.
The exchanges took place before 13 judges of the court of first instance, Europe’s second-highest court. They are to cross-examine both sides’ lawyers later on Tuesday in a proceeding likely to determine the future shape of the IT industry and of the commission’s regulatory powers.
Jean-François Bellis, Microsoft’s main lawyer, attacked the ruling that forced the group to issue a version of Windows without media player technology known as XPN. ”The commission has not identified a single customer who would even want to buy Windows without its media functionality,” he told the court.
”No PC manufacturer has shipped a PC with XPN installed on it: not Toshiba, not H-P, not a single one. As of March 31 this year, 1 787 copies of XPN had been ordered by retail shops — equivalent to less than 0,005% of all sales of Windows XP in Europe or 35,5-million in the last nine months.”
Arguing that the commission had failed to prove that Microsoft had unlawfully tied two separate products, Bellis insisted that the group had designed its operating system so that PC makers could install as many third-party players as they wished and the commission’s theory that the market had ”tipped” irredeemably in its favour was based on speculation. He maintained that Microsoft had simply tied WMP to Windows to improve its offering to consumers and software developers.
But Per Hellstrom, the commission’s main lawyer, replied that WMP was clearly a separate product and Microsoft simply wanted to ruin its rivals by tying the two together. ”This is the world according to Microsoft, which decides what’s best for consumers and can include what it wants without giving customers a choice.”
More than 70% of PCs sold in Europe only had one media player installed and that was the case for 80% worldwide, he said, insisting that, far from flourishing, rivals found it costly and time-consuming to switch to a non-Microsoft product.
Backstory
Microsoft was founded only 30 years ago but now controls 95% of the global market for desktop computer systems. In late 1998 the European commission began an anti-trust inquiry into Microsoft’s alleged abuse of its dominant position following complaints from Sun Microsystems.
Mario Monti, then competition commissioner, ruled in March 2004, that Microsoft had abused its position in two areas and imposed a record â,¬497-million fine.
The European court of first instance is this week being asked to annul the Monti ruling, with a verdict expected late next year. – Guardian Unlimited Â