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Microsoft Seeks to Overturn EU Ruling
Microsoft Seeks to Overturn EU Ruling, Tells Court It Was Forced to Make Product No One Wanted
By AOIFE WHITE AP Business Writer
LUXEMBOURG Apr 24, 2006 (AP) The European Commission forced the world's largest software maker to offer a product no one wanted and virtually no one bought, Microsoft Corp. told the EU's second highest court Monday as it began trying to overturn a landmark antitrust ruling against it.
Microsoft lawyer Jean-Francois Bellis said in his opening statement that the Commission made "fundamental errors of fact and reasoning" in its decision two years ago that the company abused its dominant market position to muscle into media software.
The Commission's order that Microsoft offer customers a version of its Windows desktop operating system without the Media Player intended to give people a free choice of media software has been a spectacular failure, he said.
No computer maker has shipped a PC or laptop with the media player-free Windows XP N version, which is available only in Europe. "Not a single one," Bellis told the 13 judges. Some 90 percent of Windows sales come from being pre-installed on computers when they are sold.
XP N sales represent 0.005 percent of overall XP sales in Europe, Microsoft told the court, and many of the copies produced may remain unsold, it said.
French retailer FNAC, the single largest retailer to order XP N with 46 percent of the orders, has said that it sees no consumer demand for the product, Microsoft said.
But others argued that it is Microsoft's continued power over the market that is keeping people from embracing XP N, not a lack of consumer interest.
Thomas Vinje, a lawyer for the European Committee for Interoperable Systems a group representing some of Microsoft's rivals that is backing the Commission said the lack of sales was a clear sign that Microsoft had held the market in check.
"It's a missile that comes back squarely into the heart of Microsoft," he said, adding that in 1999 PC makers had a choice of bundling different media players but with Media Player tied to the Windows OS, it quickly became the first pick for new computers.
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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.