ABC News
Microsoft, EU Face Off Over Antitrust
2 Years After Record Fine, Microsoft Corp. and EU Face Off Over Antitrust Issues
By AOIFE WHITE AP Business Writer
LUXEMBOURG Apr 24, 2006 (AP) Microsoft Corp. went to court Monday to challenge the European Commission's landmark antitrust ruling against it, arguing that the future of innovation in the technology industry was at stake.
In its opening statement, Microsoft lawyer Jean-Francois Bellis said the Commission made "serious errors" in its decision two years ago that the company abused its dominant market position.
The hearing, expected to take five days, will focus on Microsoft's behavior in the late 1990s, with EU regulators using evidence from the company's rivals.
At its core, the hearing is focusing on two issues. The first is Microsoft's bundling of Media Player as a core part of its operating system, the second is on the Commission's order that Microsoft share information and code with competitors to help them make software that worked smoothly with Windows.
In 2004, the Redmond, Wash.-based company was fined a record 497 million euros ($613 million) after the European Commission found that Microsoft had taken advantage of its position as the leading supplier of software for PC operating systems to elbow in on rivals for work group server operating systems and for media players.
The commission ordered Microsoft to share information and communications code with rivals and to market a version of Windows without the media player to give consumers a free choice of media software.
In opening arguments, Bellis claimed that stripping out Media Player from Windows XP left consumers without the ability to listen to more music or watch more video.
On the Commission's order, Microsoft made available for purchase Windows XPN, which did not include the ubiquitous player. That, lawyers said, meant consumers could not listen to CDs or play music from providers like Yahoo or Napster.
"Many functions … were lost in creating Windows XPN," Bellis said, adding that all media functionality in Windows is part of the platform.
Furthermore, he said that no computer maker had shipped a PC or laptop with Windows XPN pre-installed.
Microsoft Windows Logo

Today, court proceedings in the European Union's Court of First Instance in Luxembourg began as Microsoft Corporation filed an appeal against the European Union Commission's decision in an anti-trust case, commenting that the Commission made several mistakes in its decision to fine Microsoft 497 million euros, or approximately 613 million dollars concerning several allegations that Microsoft used its majority share in desktop software to also take over the video and media player business. The Commission also forced Microsoft to produce a version of Windows XP that did not include Windows Media Player. Only 1,787 copies were ordered through March 31st. Microsoft has also alleged that the proposed punishment of 2 million euros per day is too severe. The EU has also proposed that Microsoft's upcoming operating system, Windows Vista will also exclude rivals through bundling programs. Although a decision is not expected for at least several months, analysts have predicted that a verdict in favor of Microsoft would destroy the EU Commission's prestige as well as any case against Microsoft.