News

Microsoft 'Optimistic' After Start of EU Trial

Microsoft lawyers maintain that company has complied more than necessary, but still faces major fines if found in violation of 2004 antitrust order.

• By The Associated Press
• March 31, 2006

A lawyer for the world's biggest software company made the comment Friday at the start of a final day of hearings which are the company's last chance to defend itself before the EU decides whether to levy the fines. Well over a hundred lawyers and officials attended the hearing.

EU regulators claim the company still has to meet the terms of a 2-year-old antitrust order to share technical information with rivals that would help them make software compatible with Microsoft Windows.

Company lawyer Brad Smith said the dialogue between the EU's executive Commission and Microsoft was constructive during Thursday's first day of hearings. "I only wish we could have had that kind of dialogue sooner," he said.

"I am more optimistic than when I arrived yesterday that this type of constructive dialogue can in fact lead to a real solution."

Smith said Thursday that fines were not the answer and said Microsoft had gone beyond complying with the EU's 2004 antitrust order that also forced the company to hand over the EU's largest ever antitrust fine of 497 million euros ($613 million.)

The EU has threatened additional daily fines, backdated to Dec. 15, saying the technical manual Microsoft provided that month needed a radical overhaul to make it usable.

EU Competition Commissioner Neelie Kroes warned earlier this month that the company was on course for large fines if it kept up its recent conduct.

The U.S. government wrote to Kroes, two other senior officials and EU governments on Monday about the Microsoft case, EU and U.S. officials said Friday.

The U.S. mission to the EU said it merely wanted to point out that if Microsoft's allegations that antitrust regulators lacked transparency and fairness are accurate that "would be of substantial concern to the U.S."

The mission stressed that it was not taking a position on the case and it was normal for both sides to be in regular contact about business issues.

EU spokesman Jonathan Todd would not comment on the contents of the letter, describing it as "an informal paper that did not have any official status" and saying that the EU and the U.S. usually cooperated closely on antitrust issues.

Microsoft has complained that the EU wrongly withheld documents it needed to challenge the 2004 ruling at the EU's second-highest court in late April. It alleges that EU officials and Microsoft rivals may have influenced a report from an independent monitor that criticized the company's efforts to follow the order.

Thomas Vinje, a lawyer for an industry group of Microsoft rivals -- the European Committee for Interoperable Systems -- insisted Microsoft was still not complying with an EU order to share technical information with its rivals.

"There is no compliance yet and it is about time there was compliance," he said before addressing the hearing.

He said the technical manual Microsoft gave EU regulators was "absolutely clearly not good enough." "Everybody who's looked at it other than Microsoft and paid witnesses has said it's not good enough."

The EU has rejected Microsoft's claims that regulators had not been clear and consistent about what they were looking for. The EU said it has clearly spelled out Microsoft's obligations in the original 302-page antitrust order.

Microsoft told the hearing Thursday the technical manual that an independent monitor branded "unusable" met industry standards. Six technology companies testified that they were using the manual to create software compatible with Microsoft's products. It named four of them as EMC Corp., StarBak Communications Inc., Tandberg Television Ltd. and Network Appliances.

The EU Commission maintains that many companies had said the information Microsoft provided was not suitable.