EU Opens New Probes of Microsoft

Source: Wall Street Journal.

EU Opens New Probes of Microsoft
Regulators to Focus on Office Software, Web Browsers
By CHARLES FORELLE
January 14, 2008 11:48 a.m.

BRUSSELS—The European Union, fresh from victory in a landmark
antitrust case against Microsoft Corp., has opened a second and
potentially more costly complaint.

European Commission regulators Monday announced they have launched two
new formal investigations into the software giant's business
practices, setting the stage for a renewed clash between the American
tech mainstay and the EU's increasingly powerful antitrust cops.
[More on the case] MORE ON THE CASE

• Microsoft Again Faces EU Heat
12/14/07
• Microsoft Yields in EU Antitrust Battle
10/23/07
• EU Court Rejects Microsoft's Appeal
9/18/07

This time, the commission is focusing on two core areas of Microsoft's
business: its Web browser, Internet Explorer; and Office, its
massively profitable software suite. The EU is examining whether
Microsoft harms alternative browser vendors by including Internet
Explorer with its ubiquitous Windows operating system, and whether it
harms alternative office-suite vendors by controlling the file format
used to store office documents.

The cases stem from two complaints, one from Norwegian browser-vendor
Opera Software ASA filed last month, the other a 2006 charge from the
European Committee for Interoperable Systems, a group led by
International Business Machines Corp. and other Microsoft rivals that
has been a driving force in Europe's antitrust pursuit of the company.

In addition to touching on Office, the IBM-led group's complaint
addresses Microsoft's refusal "to disclose interoperability
information across a broad range of products," according to the EU,
indicating that the regulators could make an even broader case.

In a statement, Microsoft said it would cooperate with the probes and
was "committed to ensuring" that the company is "in full compliance
with European law."

In 2004, after a contentious six-year probe, the EU charged Microsoft
with illegally shutting out rival Sun Microsystems Inc. by withholding
computer code needed to make Sun's computers work with Windows-based
machines, and with abusing its Windows monopoly by bundling
media-player software with the operating system. It assessed a record
€497 million ($612 million) fine.

That case ended in dramatic fashion last September, when an EU court
vindicated the EU's position in stark terms, leaving Microsoft with
little to do but capitulate. A month later, the company said it
wouldn't pursue further appeals, ending the case.

Besides the fines -- which could total billions of euros -- the
practical effect was fairly small. Standalone media players had
declined in importance as Web-based video ascended, and the types of
machines Sun wanted access to represent a small plume of a
many-feathered market.

But EU regulators had won a critical precedent: The judges on the
Court of First Instance confirmed the illegality of a monopolist's
bundling products, and confirmed the EU's power to compel a dominant
company to share so-called interoperability information.

Write to Charles Forelle at charles.forelle@wsj.com

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