EU Judge Pushes For Microsoft Antitrust Settlement


The judge deciding whether to uphold or suspend the European Union's landmark antitrust ruling against Microsoft prefers encouraging parties to find a "third way" outside of litigation--partly because that's the way things are often done back in his home country of Denmark.

During two days of hearings at the European Court of First Instance in Luxembourg, court president Bo Vesterdorf repeatedly tried to nudge Microsoft and the European Commission, the EU's executive, closer together, even making nitty-gritty suggestions to help them find common ground.

"We don't like to fight that much," Vibeke Vindelov, a law professor at the University of Copenhagen and expert in mediation, said Saturday of her fellow Scandinavians. "We'd rather talk about it."

Although attempts to reach a settlement collapsed early this year, Microsoft repeatedly says it is open to resuming talks. "There must be a better way to address these issues," Microsoft chief lawyer Brad Smith told reporters Friday.

The EU has stood firm, however, preferring to wait for Vesterdorf's ruling, which should come in a month or two.

After a five-year investigation, the EU on March 24 declared Microsoft guilty of abusing a dominant position with Windows. The EU's order goes directly to the heart of the company's strategy of integrating new functions into its ubiquitous operating system to keep growing.

"I don't think there has been a case in this court where a company has been subjected to a greater attack on what really constitutes its substance," Microsoft lawyer Jean-Francois Bellis said in his closing argument Friday.

Microsoft is trying to have the ruling suspended pending its appeal, which could take years to wind its way through the courts.

The EU wants sweeping changes in Microsoft's business practices implemented immediately, arguing in court that delay could be fatal to Microsoft rivals in the fast-moving computer industry.

Before adjourning, Vesterdorf promised a decision ``as quickly as possible.''

The judge has the power to suspend the EU order in total or in part, but cannot rewrite it himself. However, legal experts say he could suspend it for a limited period to encourage the parties to work things out, reporting back to him on their progress, as he did in a recent case involving the European Commission and French beef producers.

"What the president can do is to encourage the parties to find a third way, something different that can be acceptable," said Javier Ruiz Calzado, a lawyer at Latham and Watkins in Brussels who previously worked at the court. "In particular this president, because he's Danish ... likes very much to push the parties and invite them to settle the things."

Vesterdorf's mediation efforts are typical for Scandinavian society, which prefers compromise, if not unanimity, over confrontation.

Denmark began an experiment March 1, 2003, in four district courts and one high court, where a judge is authorized to offer mediation to parties in civil cases as a quicker and cheaper way to resolve differences.

"It has turned out to be a very big success," Vindelov said by phone. "A lot of people are choosing that possibility."

The program had started in Norway and now Sweden and Finland are in the process of trying it too, she said.

"It isn't always working--we can have big fights too," she added. "But we also have a tradition for mediation."

The EU order against Microsoft had three main parts:

-a record $600 million fine;

-an order to release more technical specifications to rivals so that their servers, which run office networks, could communicate as well as Microsoft's own products do;

-a demand for an additional version of Windows minus Microsoft's Windows Media Player, which now is included.

The commission argues that last demand would give computer manufacturers the choice of which digital media playing software to install--thus creating a "level playing field" for Microsoft rivals like RealNetworks and Apple Computer.

To win its stay, Microsoft had to prove it had a good chance of winning the overall appeal, that it would suffer "irreparable harm" if the order went into effect now, and that its interests were not outweighed by those of consumers or competitors in the market.

During the hearings, the lawyers came under heated grilling from Vesterdorf, who said he wanted to be "provocative."

The EU legal team seemed to be on the defensive most often, but court watchers cautioned about making assumptions about Vesterdorf's eventual ruling, since sometimes judges are hardest on the party they end up favoring.

Vesterdorf has granted a stay in fewer than 20 percent of cases over the past three years.

Among his suggestions were allowing Microsoft to put a few lines of digital media code--but not the full Media Player--back to help reduce the burden on third-party software developers that Microsoft and the EU agreed would be harmed by its absence.

He proposed adding a clause to the license for technical specifications forbidding those who get it from infringing on any of Microsoft's patents.

When Microsoft lawyer Ian Forrester asked what would keep anyone from violating that clause, Vesterdorf replied:
"Because they might run into the hard fist of Microsoft?"

"Yes, perhaps," Forrester said.

The judge got Microsoft to acknowledge it had been prepared to go even further on sharing such information during the settlement talks, and had the commission conceding it couldn't be sure its Media Player order would have the desired effect--or any at all.

EU officials say there is no precedent for agreeing to a settlement after a decision has been formally adopted, as this one was. But it's also relatively rare for the EU to issue orders meant to address monopoly abuses that it says are still continuing.

Having argued that urgent measures were needed to protect consumers and competition in the industry, pressure on the EU to talk would mount should Microsoft win even a temporary suspension.

But that's not the only option: Vesterdorf's decision can be appealed to the president of the EU's highest court: Greek judge Vassilios Skouris.

For more on Microsoft's antitrust saga, see CRN.

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