Microsoft Takes Stand In European Antitrust Case

After nearly two days of closed-door hearings, Microsoft turned the floor over to its critics, who argue the U.S. software giant is trying to corner new markets with its Windows monopoly.

On Friday, Sun Microsystems, which filed the original complaint against Microsoft in 1998, and RealNetworks take the stand, followed by two Microsoft-friendly trade groups. Microsoft then gets an hour and 15 minutes for a final statement.

The European Commission is expected to issue its decision in the nearly five-year-old case next spring if no settlement is reached. Microsoft is hoping for a deal to avoid penalties that could be the toughest it has faced on either side of the Atlantic.

"We've come to Brussels not only to discuss the issues but to work things out," said Brad Smith, Microsoft's senior vice president for law and corporate affairs, to reporters after the hearing broke for lunch. He said he looked forward to continuing discussions over the next weeks and that Microsoft would work with "energy and creativity" to resolve the Commission's concerns.

People inside the hearing said Microsoft focused Thursday on the market for multimedia software, arguing that tying its own Media Player into Windows does not give it an unfair edge over rivals like RealNetworks and QuickTime.

It also maintains the 2001 U.S. settlement on similar charges involving Internet browsers address the European concerns, although the Commission said last August its market surveys found Microsoft's anticompetitive behavior continued after that deal.

That followed a day of testimony about the market for low-end servers, which tie desktop computers together. The Commission charges Microsoft is withholding software codes that competitors need to make their products work as seamlessly with Windows as Microsoft's own programs.

People familiar with the testimony said Microsoft sought to broaden the Commission's definition of the market, arguing that its apparent dominant position vanishes if more powerful servers--those costing more than $25,000 --are included.

But rivals defend the Commission's decision to look only at the office market, where Windows prevails. "We're talking about the server in my office and yours as opposed to that running an airport," said one.

Scheduled to speak Thursday afternoon were the Computer and Communications Industry Association, a Washington-based trade group critical of Microsoft; the Free Software Foundation Europe, of Essen, Germany; Provo, Utah-based Novell and others.

Separately, EU antitrust officials are pursuing charges from rivals that the latest desktop operating system is designed to help extend Microsoft's dominance into new markets such as instant messaging, e-mail and handheld devices such as mobile phones.

Following up a complaint filed in February, the Commission has sent fact-finding letters to "market participants' about the allegations, sources close to the situation said, speaking on condition of anonymity.

Once evidence is in, the Commission will decide whether to press charges.

Microsoft's main concern is defending its long-standing practice of keeping Windows ahead by incorporating new features in the operating system--which it sees as benefiting consumers and rivals view as unfair competition.

Its next generation of Windows, code-named Longhorn, will have a built-in search engine that could threaten Google, Yahoo and other companies.

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