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Thursday, April 27, 2006
Microsoft EU Battle Gets Technical

The legal dispute between Microsoft and the EU is plunging into technical issues in favor of the U.S. software giant which is appealing the 2004 judgment that found it guilty of illegally abusing of its dominant position.

On the fourth of a week-long hearing at Europe's second highest court, the Court of First Instance, 13 judges are weighing whether to uphold the decision to order Microsoft to change its business practices and fine it a record €497 million.

In 2004, the Commission said Microsoft must give rivals more information so their print, file access and log-in server software could work smoothly with its Windows system which is used by 95% of the world's PCs.

To achieve this interoperability, the Commission requires that Microsoft provides protocols. Microsoft argues that providing that information would step on its intellectual property rights.

It got very technical on Wednesday when John Shewchuk, Engineer at Microsoft tried to explain to the judges in a never-ending hour what an operating system for servers was. Despite the dozens of colorful graphics, the presentation was nothing more than one big yawn.

"We submit that the (Commission) decision is an attempt to reconfigure (how the) market works by handicapping the leading player in perpetuity," Microsoft lawyer Ian Forrester told the court.

But the Commission and critics say that is not true and that instead not only are rivals pushed out of the market for server software but innovation is stalled too.

In a three-and-a-half hour monologue that sent many observers in the crowded courtroom to sleep, commission lawyer Anthony Whelan, dismissed claims by Microsoft that its trade secrets amounted to intellectual property.

He said Microsoft had merely been ordered to move back towards its earlier, more equitable pattern of doing business in the field. Microsoft broke it by refusing to supply such information, Whelan said, adding that sharing was a standard practice.

The court is expected to take months to come to a verdict, but a ruling upholding the decision could encourage the Commission to act again.

The Commission's reputation as Europe's top antitrust authority hinges on the outcome of the hearing.

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