Microsoft Faces Antitrust Complaints on Three Fronts

   A series of antitrust-related events has dogged Microsoft in the past few days. The European Union (EU), the state of Massachusetts, and the US Department of Justice (DOJ) all issued separate complaints that come to the same conclusion: Despite its settlement with the US government and several US states, Microsoft continues to abuse its software monopoly and run roughshod over the industry. The complaints came just as Microsoft issued its official response to the EU's proposed antitrust remedies, which Microsoft says are too strict.
   Reuters reported this weekend that according to sources familiar with the case, beginning November 12, the European Commission--the EU's antitrust arm--will conduct 2 to 3 days of oral hearings in the European antitrust case against Microsoft. In three separate statements of objection, the Commission charged Microsoft with violating European antitrust laws and gave the company until last Friday to respond to the charges; Microsoft can use the hearings to discuss the charges in person with Commission officials and further argue its opinion.
   The Commission's charges against Microsoft will sound familiar to anyone who followed the company's epic antitrust struggles in the United States. According to the Commission, Microsoft designed its server software to work better with its own products than with its rivals' products and integrated Windows Media Player (WMP) in Windows to fend off competition. Microsoft denies that it has done anything wrong but says it will work closely with the Commission to resolve the case.
   From a remedy standpoint, the Commission has wider leeway than the DOJ, its US counterpart. The Commission can levy a maximum fine of about $3 billion on Microsoft and can force Microsoft to unbundle its media player from Windows or ship an alternative rival media player in Windows and to share its server protocols with rivals so that those rivals can more easily create software that works with Windows Server.
   In related news, Massachusetts Attorney General Thomas F. Reilly revealed late last week that he's investigating complaints about Microsoft's anticompetitive behavior since the company's settlement with the US government and several other US states. Reilly began the investigation, which a status report filed with the DOJ revealed, after the state received more than two dozen complaints against Microsoft that "raise troubling questions about Microsoft's ongoing commercial behavior."
   The DOJ and prosecutors from the so-called settling states have also lodged a complaint against Microsoft. They filed their complaint with Judge Colleen Kollar-Kotelly, who gave the green light to Microsoft's US antitrust settlement, charging that the music-purchasing feature in Windows XP violates the settlement and that the settlement's clause that dictates sharing of Windows technical features isn't working as planned. The second concern is somewhat alarming because it centers on the focal point of the DOJ settlement. So far, only eight companies have signed up for the technology-sharing agreement, which forces Microsoft to share the details of the protocols that Windows uses to communicate with applications and services at a low level. Knowledge of these technologies should help third parties write software that works as well with Windows as Microsoft's products do. But the DOJ and nonsettling states now say that too few companies have signed the agreement, largely because it's too restrictive. Microsoft says the eight companies that signed the agreement prove that it's working.
   The music-purchasing concern is new but is related to the integration charges Microsoft has fought since 1998. According to the DOJ complaint, XP's "Shop for Music Online" feature violates a core tenet of the settlement because it launches Microsoft Internet Explorer (IE)--even when another browser is selected as the default. Microsoft argues that the feature works as intended and vows not to change it. "We believe the use of Internet Explorer by the 'Shop for Music' link in Windows is consistent with the design rules established by the consent decree," a Microsoft spokesperson said this weekend, noting that representatives from Microsoft and the DOJ had "conferred extensively about this issue."

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