- The Washington Times - Tuesday, November 11, 2003

BRUSSELS (AP) — Microsoft Corp. begins a last-ditch effort today to avoid harsh penalties in Europe for reputed monopolistic behavior that could force it to change the way it sells its ubiquitous Windows software.

But beyond the fireworks expected during three days of hearings, Microsoft’s underlying aim is likely to be searching for a damage-controlling settlement with the European Union.

“I think there’ll be quite a lot of grandstanding, with a view on Microsoft’s part to achieve a negotiated settlement,” said Martin Baker, chief antitrust lawyer at Taylor Wessing in London. “They’re going to want to limit the economic impact.”

EU regulators, Microsoft lawyers and “interested third parties” — mainly angry Microsoft competitors — weren’t expected to present much new evidence. Instead, they will use the talks behind closed doors to poke holes in each others’ cases.

Microsoft faces charges that it is illegally trying to extend its Windows operating system dominance into the market for servers, which tie desktop computers together, as well as into “media players,” which play music and video on computers.

The European Commission, the EU’s antitrust enforcer, warned in August that it was prepared to levy hefty fines for past misconduct and demand its own remedies, such as forcing Microsoft to remove its built-in Media Player from Windows or to include rival players as well.

The company also may have to disclose more prized software code — chiefly elements of its operating systems that govern their interaction with other companies’ software — to competitors in the server market.

Although an order to spin off Media Player, for example, would legally only apply to software sold in the European Union, Microsoft has argued that creating different versions would be impractical.

Microsoft’s main concern, however, is defending its long-standing practice of maintaining Windows’ dominance by incorporating new features — which it sees as benefiting consumers and which competitors view as unfair competition.

The European Union has delayed a decision several times to buttress its charges with additional evidence, insiders say. EU trustbusters want to avoid a repeat of three embarrassing court defeats last year and to have their defenses ready in the event of another trans-Atlantic firestorm like the one that followed their 2001 veto of the GE-Honeywell merger.


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