BRUSSELS, 7 August 2003 — The European Union yesterday gave US software giant Microsoft a “last opportunity” to answer charges that it has unfairly crushed competitors or face the prospect of fines and enforced changes to its ways.
The European Commission, the EU’s executive, said the interim findings of a four-year antitrust investigation showed Microsoft guilty of squelching rivals to the Windows Media Player and to its low-end servers.
Citing new evidence collated from a survey of more than 150 Microsoft customers, Brussels said it had a “very impressive and substantive” case that could lead to fines against the world’s biggest software maker. “It would be at the company’s own peril and the lawyers’ own peril to ignore this,” warned a spokesman for EU Competition Commissioner Mario Monti, Tilman Lueder.
“At this stage we have so much evidence and we are in possession of such a substantive file that we think that any decision we can take on that basis will withstand scrutiny by the European Court of Justice,” Lueder told reporters.
The Commission said it had sent Microsoft a “statement of objections”, explaining the findings and recommending remedies such as stripping Media Player from the Windows operating system and revealing product secrets for its servers.
“This statement of objections ... gives Microsoft a last opportunity to comment before the Commission concludes the case,” Monti said in a statement.
“We are determined to ensure that the final outcome of this case is to the benefit of innovation and consumers alike,” he said.
Microsoft, which last year settled a long-running antitrust case with the US government, now has one month to respond to the Commission’s statement.
Lueder said Microsoft would face fines if the preliminary findings are upheld, but declined to say how much these might be.
“The fine is a function of the gravity of the abuse and its duration. We can add on aggravating or mitigating circumstances,” he said.
Microsoft’s lead lawyer on the EU case, Horacio Gutierrez, played down the prospect of fines as being “standard in every statement of objections”.
“We will do what we can to learn from the statement of objections what the Commission’s concerns are,” he told AFP subsidiary AFX News.
Microsoft argues that its settlement with the US government, along with guarantees it has made to the European Commission, should be enough for Brussels.
But the Commission said that despite two previous statements of objections addressed to Microsoft, the firm’s “abuses are still ongoing”.
According to the preliminary findings, Microsoft has extended the “overwhelmingly dominant position” of Windows into the market for servers that enable personal computers to communicate in a corporate network. Tying Media Player to all Windows operating systems “weakens competition on the merits, stifles product innovation, and ultimately reduces consumer choice”, the EU executive added.
In its proposed remedies, the Commission said Microsoft could either remove Media Player from Windows or add rival programs, such as Real Player and Apple QuickTime.
The company would also be required to reveal the programming code for its low-end servers, to enable rival servers to work with Windows PCs.
The release of the preliminary findings shows the Commission’s anti-trust watchdogs are confident they have an overwhelming case against Microsoft.
