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Microsoft argues for suspension of EU sanctions


In the second day of a hearing before the European Court of First Instance, Microsoft will today argue that sanctions imposed on the software company following an antitrust ruling by the Commission should be suspended until an appeal of the antitrust decision is completed.

In March this year, following a five-year investigation, the European Commission found that Microsoft broke competition law by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players.

Because the illegal behaviour was still ongoing, the Commission ordered Microsoft to disclose to competitors, within 120 days, the interfaces required for their products to be able to "talk" with the ubiquitous Windows operating system.

Microsoft was also required, by 28th June, to offer a version of Windows without Windows Media Player to PC manufacturers (or when selling directly to end users). In addition, Microsoft was fined €497 million for abusing its market power in the EU.

Microsoft paid the fine into an escrow account in July, where it will be held until the appeal against the ruling has been resolved, but has not yet been forced to comply with the other sanctions. Instead, the software company asked the Court of First Instance to suspend the sanctions until the antitrust appeals process had been completed.

In June the Commission confirmed that it would not enforce the sanctions until the European Court of First Instance had decided whether a suspension was actually appropriate. It is this hearing that is now taking place.

The hearing, before Court President Bo Vesterdorf, yesterday considered the interoperability issue, and specifically the question of whether disclosing details of the interface software now would cause "irreparable damage" to Microsoft in the future – particularly if the Commission's antitrust finding is later struck down by the Court.

"This is the first time in antitrust history where a company has been ordered to draw up a description of secret technology and deliver it to competitors," Microsoft lawyer Ian Forrester QC told the Court, according to the LA Times. Once released, the details could never be secret again, he explained.

But according to the Washington Post, Microsoft's case was harmed yesterday by revelations that in unsuccessful settlement negotiations prior to the March finding Microsoft had agreed to a similar sort of licensing agreement as it is now arguing against.

Today the hearing moves on to consider the removal of Media Player from some versions of Windows.

Microsoft is expected to argue that to offer two versions of Windows now – with and without the Media Player – would harm the company, while opponents of the software giant will argue that unless the sanction is enforced now, Microsoft will begin to dominate the media players market, as it has the desktop sector.

A decision is expected within two months.

 

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