EU's Monti talks about Microsoft ruling

/ Source: Financial Times

Mario Monti was looking to the future on Wednesday when talking about the biggest decision of his life. However, his critics in Microsoft argued he had rejected a perfect deal in favor of an uncertain principle. (MSNBC is a Microsoft-NBC joint venture.)

Speaking to the FT, the European Union's competition commissioner said he did not want to make an "example" of Microsoft, but made clear that the company could expect further Commission action in the not too distant future.

That was the clear message of Mr. Monti's reflections on the final importance of fining Microsoft $497 million euros ($613 million), ordering it to share information with its rivals in the server market and offer a version of Windows without its Media Player program.

"We tried to ... set out principles which will help in handling possible future broadly similar cases, some of which are not so hypothetical because we have already had some complaints," he said.

This refers to a complaint filed last year that goes far beyond the current case, which is confined to specific markets for servers and for media player programs. The Commission argues that Microsoft has illegally used its Windows monopoly to squeeze out rivals.

The pending case, which deals with the entire Windows XP operating system, is much more extensive, but follows up both the basic issues behind yesterday's decision. People close to Mr. Monti hope that the next case could be resolved in two years — the present struggle took five years.

The problem is that — partly to assuage possible tensions with the U.S. — Mr. Monti has watered down talk of precedents for the coming fight. That may make it legally harder to push through, even with the political impetus provided by yesterday's decision.

Microsoft compromise rejected
Last week, Mr. Monti rejected an offer by Microsoft to include three rival media player programs on most PCs shipped worldwide and to address "all of the Commission's concerns" about inter-operability between Windows-driven PCs and other companies' server systems.

At the time he said he did so to have a "strong precedent" for the coming battles. Now he argues that no new legal ground has been broken by the decision, dismissing any suggestion that the Commission has "expropriated" Microsoft's intellectual property.

Part of the reason for his caution appears to be his concern to move in lockstep with the U.S., which applies the "rule of reason" to such cases — it weighs up individual cases on their merits rather than developing a hard and fast rule.

"We did what I believed the U.S. court of appeals suggested be done, applying the rule of reason to the tying issues," he said.

But in Microsoft, even Mr. Monti's modesty about precedents was regarded with skepticism. "If all this does is . . . break no new legal ground, then it's unclear to me why a precedent was needed through a decision," says Brad Smith, Microsoft general counsel. "I think we would have set a better precedent by solving the issues of this case and distributing 300 million media players to consumers."