Microsoft settlement chances in Europe hang in the balance

Signs of a settlement in Microsoft’s long-running European antitrust case may have surfaced, but many opponents of the software...

Signs of a settlement in Microsoft’s long-running European antitrust case may have surfaced, but many opponents of the software company remained unconvinced.

In a statement, the software company's general counsel, Brad Smith, gave the strongest indication yet that he is seeking a settlement to avert a negative ruling in the long-running antitrust  case, which the European Commission is close to concluding.

"We have come to Brussels not only to discuss the issues but to work things out," Smith said.

"We really do look forward, not just to the next day and a half, but to the weeks that follow, and we will bring to these weeks a great sense of energy and creativity to explore every possible way to come to solutions to the questions and concerns that people may have," he added.

Microsoft has said that it has co-operated with the commission in the hope of settling the case, but there has been no evidence of a meeting of minds.

In August, when the commission issued its third statement of objections, it accused the company of continuing to abuse the dominance of its Windows operating system software.

In an unusual step, the commission’s statement of objections outlined the remedies it would seek from Microsoft if the commission ruled against it.

Either its Media Player, audio and video playing software would have to be unbundled from Windows and sold separately, or a rival, such as RealNetworks' RealOne Player or Apple Computer's Quicktime, would have to be bundled in with it.

In addition, the commission demanded that Microsoft reveal enough Windows computer code to allow rivals to make server software as compatible with the ubiquitous operating system as Microsoft’s own server software.

"The commission is trying to make it as easy as possible for Microsoft  to offer a solution," said a source close to the European Commission.

The August statement sent two clear messages to Microsoft, the source added.

"First, that the commission wants to find an outcome that protects the interests of consumers, and second, that if it does come to a ruling, it will be negative for the firm and rock solid legally."

"Judging by today’s remarks, it looks like Microsoft finally realises that the commission is serious and that its case is strong."

Brussels-based lawyers have tried to imagine what Microsoft could offer that would address the commission’s concerns while preserving the Microsoft business model, which relies heavily on bundling applications such as Media Player into Windows.

Making Windows more interoperable with other applications such as rivals’ server software will be the easy part, they agreed. There is already a precedent for it.

If people continued to buy the bundled version of Windows in preference to an a-la-carte package of applications compiled by computer suppliers, this would imply that the commission was wrong to believe that Microsoft has been limiting consumer choice, said Jacques Bourgeois,  lawyer with Akin Gump Strauss Hauer & Feld.

Computer hardware sellers would only take the bundled version and software developers would continue to design their products to work with Microsoft’s applications, he said. "I still don’t think they will reach a settlement," Thomas Vinje, partner at lawfirm, Morrison & Foerster said.


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