Microsoft asks EU court to suspend remedies

Microsoft has asked a judge to suspend the European Commission's antitrust ruling against it, arguing that secrets revealed now...

Microsoft has asked a judge to suspend the European Commission's antitrust ruling against it, arguing that secrets revealed now cannot be retracted.

The software maker made its case during the first day of a two-day public hearing at the Court of First Instance (CFI) in Luxembourg, where the company is waging its battle to appeal a decision that could significantly impact the way in which it does business.

The hearings at the European Union's second-highest court are only focused on whether to suspend the antitrust remedies pending appeal. A decision, to come from CFI president Bo Vesterdorf, is not expected to be reached for around two months. It is within Vesterdorf's purview to suspend just one of the remedies, or both, or to fully deny the request.

After a five-year investigation, the commission ruled in March that Microsoft had abused its dominance in the PC operating systems market to gain an edge in related markets, such as media players and server software, giving it an unfair advantage over rivals such as RealNetworks and Novell.

It ordered the company to pay a fine of €497m (£276m) and offer a version of its Windows operating system in Europe without its Windows Media Player (WMP) software. It also ordered Microsoft to reveal enough Windows code to allow rivals to build competing server software that works with Windows.

Microsoft lawyers also argued that there is significant competition in the market, in an attempt to douse claims by opponents that the company has used its dominance in the desktop operating system business to shut them out of the market.

The commission's representative, Walter Moells, said that by insisting that Microsoft make available the specifications for its workgroup server software, the commission aimed to prevent the company from extending its monopoly in the desktop PC operating system market into the client server market.

Moells also said that Microsoft failed to demonstrate serious and irreparable damage, a key requirement if the firm is to win a stay of execution. Instead, it "simply claims that its intellectual property and patent rights are being infringed. It does not even claim that the market would evolve against its favour".

Giving protocols to rivals indefinitely would reduce the incentive to innovate, Microsoft claimed in the hearing.

The judge then focused on the point of irreparable harm, asking Microsoft if there is any way it could make technical changes at a later date to the specifications it shares with competitors, in order to protect its intellectual property.

"It's possible in principle to create all new protocols but impossible in practice," said Microsoft representative Roy Hirst.

While the court weighs the arguments, Microsoft said that it has already "spent millions" to be able to comply with the commission's demands to change Windows, should it lose its appeal.

Microsoft claimed that it set up a special group within the company to prepare interoperability specifications for its server software. Those specifications would be ready three to four weeks after the court makes its ruling, the company said.

Microsoft is putting all of its legal firepower behind appealing the commission's decision, which is seen as being far stiffer than the settlement the company reached with US antitrust authorities, in that it affects the way in which Microsoft packages its products together.

Friday's hearings will focus on the section of the remedy that calls for an unbundling of its media player software from Windows.

The request for a suspension of the remedies is just the beginning of an appeal process that legal experts have estimated could take anywhere from two to five years.

Scarlett Pruitt and Simon Taylor write for IDG News Service

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