Advertising

The Seattle Times Company

NWjobs | NWautos | NWhomes | NWsource | Free Classifieds | seattletimes.com

Business / Technology


Our network sites seattletimes.com | Advanced

Originally published December 16, 2009 at 6:51 PM | Page modified December 17, 2009 at 11:16 PM

Comments (0)     E-mail E-mail article      Print Print      Share Share

After years of fighting, Microsoft and EU settle antitrust case without rancor

As Microsoft resolved more than a decade of antitrust fights with the European Union on Wednesday, the rest of the world shrugged it off.

Seattle Times technology reporter

A long slog

Antitrust issues in Europe involving Microsoft date back nearly 15 years.

1993. Novell, then based in Utah, complains to European authorities that Microsoft's licensing arrangements with computer makers violated competition rules in Europe.

1994. Microsoft settles with Novell by agreeing to slightly change the way it conducts licensing.

1996. French company Micro Leader Business complains to the European Commission after Microsoft banned the company from reselling in France the Microsoft software Micro Leader bought in Canada.

1998. The EC begins investigating complaints by Santa Clara, Calif.-based Sun Microsystems that Microsoft broke antitrust rules by using discriminatory licensing practices and refusing to give server makers critical information about the Windows operating system.

2000. Weeks before Microsoft launches Windows 2000, the EC begins looking into whether the new operating system gives Microsoft an unfair advantage over competitors.

2001. The EC expands its investigation to also focus on the Windows Media Player and whether the company unfairly uses its Windows dominance to take a bigger piece of the server market.

2004. Sun Microsystems settles an antitrust suit in the U.S. against Microsoft for $1.6 billion. Also, the EC finds the company violated antitrust laws in the media player and server market, fining Microsoft $612 million and ordering changes. Microsoft appeals.

2006. The EC rules Microsoft failed to comply with the 2004 ruling and fines the company $357 million on top of the $612 million, threatening penalties of $3.8 million a day.

2007. Microsoft loses its appeal of the 2004 ruling; European higher court upholds the $612 million fine.

2008. After browser developer Opera complains, the EC opens a new investigation into whether Microsoft used Windows to build market share for its Internet Explorer browser. Also, the EC fines Microsoft $1.4 billion for failing to comply with the 2004 ruling. Microsoft is still appealing this fine.

2009. In a concession to the EC, Microsoft offers to ship Windows 7 in Europe with a ballot box so that users can choose a browser from Microsoft's competitors.

advertising

As Microsoft resolved more than a decade of antitrust fights with the European Union on Wednesday, the rest of the world shrugged it off.

Microsoft's stock rose 0.3 percent, to $30.10, up 8 cents from Tuesday's close.

"The world has kind of moved on," said John Lopatka, a law professor at Penn State.

The agreement between Microsoft and the EU settled complaints the company had exploited the dominance of its Windows operating system to gain users for its Web browser, Internet Explorer, a practice that competitors said was unfair.

The European Commission, the antitrust regulator for the European Union, approved the five-year agreement after Microsoft said it would provide a ballot-box screen from which Windows users can choose among a variety of Web browsers.

The browser market has shifted in the two years since the EU launched this particular investigation, and Microsoft no longer rules the browser world as it once did.

The EU has also moved on to investigating cases involving other U.S. tech companies, such as Google's book project and the proposed Oracle-Sun merger.

The U.S. Federal Trade Commission also stole some of the spotlight Wednesday when it filed more antitrust charges against chip maker Intel for its sales practices.

European Commissioner for Competition Neelie Kroes said Wednesday at a news conference in Brussels that the Microsoft agreement will provide true options for users.

"Now, for the first time in over a decade, Internet users in Europe will have an effective and unbiased choice between Microsoft's Internet Explorer and competing Web browsers, such as Mozilla Firefox, Google Chrome, Apple Safari and Opera," said. Kroes, whose term ends this year. She said the changes would affect 100 million computer users in Europe.

Microsoft's lead attorney, Brad Smith, had praise for the resolution.

"This brings to a close a long-standing chapter of often challenging antitrust issues for the company in Europe," he said. "We're very pleased. It obviously represents the culmination of over a decade of processes."

The company also made changes in response to commission concerns about how Microsoft software runs with software made by rivals.

The commission began its investigation in this case after browser developer Opera complained in late 2007 that Microsoft had designed the dominant Windows operating system in a way that gave Internet Explorer an unfair advantage over rival browsers.

"It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them," Kroes said.

Though this investigation began in 2008, antitrust concerns in Europe involving Windows date back to 1998, when Sun Microsystems complained about Microsoft practices. That complaint sparked several investigations over Microsoft's bundling of media player and server software with Windows.

Microsoft and the commission negotiated and tested the ballot screen over the past year.

The ballot, which Kroes said should be ready in mid-March, will allow users in Europe to choose from the 12 most widely used browsers on the market.

Based on feedback from competitors, Microsoft agreed to list the browsers in random order.

The company must give a progress report to the commission within six months of implementing the changes, then annually.

It is significant that the European Commission accepted Microsoft's changes without levying a major fine. Last year, it fined Microsoft 899 million euros, or $1.4 billion, for failing to comply with a 2004 antitrust order. The company is still appealing that fine in a separate case.

The competitive landscape has changed significantly since Opera first complained.

Internet Explorer, which used to dominate the market, has slipped to 64 percent in November, according to research firm Net Applications, while competitors such as Mozilla's Firefox have gained in popularity.

Smith emphasized what he thought was a sea change beginning this summer in the relationship between the EU and Microsoft. "I think we have a much stronger relationship with the European Union today," he said.

Antitrust expert Lopatka offered a more tempered perspective.

"When Microsoft says that it views this as a way of putting to an end this series of long-standing antitrust cases, I don't know that it's completely over yet," he said.

"That might be a little optimistic. But this was certainly a major issue out there, and getting the EU to accept this remedy is a significant development."

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com

E-mail E-mail article      Print Print      Share Share

More Business & Technology

UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case

UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip

UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award

UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall

NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook

More Business & Technology headlines...

Comments
No comments have been posted to this article.


Get home delivery today!

Video

Advertising

AP Video

Entertainment | Top Video | World | Offbeat Video | Sci-Tech

Marketplace

Advertising