Microsoft Submits Arguments in Legal Effort to Suspend EU Order 2004-08-19 14:45 (New York)

Microsoft Submits Arguments in Legal Effort to Suspend EU Order

By Matthew Newman

Aug. 19 (Bloomberg) -- Microsoft Corp., the world's largest software maker, filed arguments at Europe's second-highest court to get a suspension of an antitrust decision requiring it to offer a version of Windows without a video and audio player.

Microsoft's written arguments were sent to the European Court of First Instance in Luxembourg today ahead of a hearing scheduled for Sept. 30 and Oct. 1, Tom Brookes, a Microsoft spokesman, said in an interview. He declined to discuss specifics about the documents, which are not made public at the court.

The European Commission, the regulatory arm of the 25-member European Union, ruled in March that Microsoft abuses the dominance of its operating system, which powers more than 90 percent of the world's personal computers. It levied a record 497 million-euro ($614 million) fine, required Microsoft to license information to rivals and to offer a version of Windows without a media player.

``I would be very surprised if there's no suspension,'' Nicholas Economides, professor of economics at the Stern School of Business at New York University who specializes in antitrust policy, said in an interview. ``It would not be in the best interest of consumers to order Microsoft to produce a Windows version without Media Player. On the (licensing of data), clearly the disclosure is irreversible, so you have to be very careful.''

Reducing Incentives

Competition Commissioner Mario Monti's March 24 decision reduces the incentives for companies to improve their products and stripping the player software amounts to forcing Microsoft to degrade Windows, the company has said. The commission argued the Redmond, Washington-based software maker must be restrained from exploiting its monopoly.

Microsoft appealed the commission's decision on June 8. The commission said it won't enforce its orders until there is a decision on whether they should be suspended pending the outcome of the appeal. The legal challenge may take as long as four years.

``The illegal conduct has had a significant adverse effect on the market, consumers and competition,'' said Ed Black, president of the Computer and Communications Industry Association, a Washington D.C.-based trade group representing Microsoft rivals. ``If companies are allowed to delay forever you will have no ability to remedy the negative impact on the market. When the evidence is so strong it doesn't make sense to not allow the remedy to take effect.''

European Court of First Instances President Bo Vesterdorf, who will rule on the suspension request, must decide whether consumers are hurt, Economides said. ``Just because the competitors are harmed, that's not a violation of antitrust law,'' he said.

--Editor: E. Sullivan.

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To contact the reporter on this story: Matthew Newman in Luxembourg at (352) 22-22-9999-5270 or

To contact the editor responsible for this story: Eamonn Sullivan at (44) 20 7330-7791 or