A European Union judge is due to decide this week if antitrust sanctions imposed on Microsoft should be suspended -- a move the software giant hopes would lead to new settlement talks.
The European Commission decided in March that Microsoft used its Windows near-monopoly in the computer operating systems market to hurt competitors, and ordered it make information available to rivals and sell a version of Windows without audio-visual software so that other software suppliers were not pre-empted. The Commission, the EU's executive, also levied a record $665 million fine.
But Bo Vesterdorf, president of the EU's Court of First Instance, is to decide whether Microsoft must comply now or wait years until a panel of judges hears its full appeal.
(Microsoft and NBC are partners in MSNBC.)
For now, what was supposed to be an early skirmish has turned into a full-blown six-month battle complete with two days of hearings before the court in Luxembourg. Vesterdorf's order itself, although not a formal decision, is expected to run to a weighty 100 to 200 pages and delve into the substance of the case.
Either side can appeal the order to the EU's highest court, the European Court of Justice, experts say. The Commission has argued the sanctions would be rendered meaningless if delayed, because the market would have moved on.
Windows Media Player
The most important question to be decided is whether Microsoft must now provide a version of Windows without its Media Player multimedia software, those on all sides say. The Commission says Microsoft should sell computer makers a version of Windows without Media Player so they can provide alternatives such as RealNetworks Inc.'s RealPlayer and Apple Computer Inc.'s QuickTime.
Any delay would allow Microsoft to push RealNetworks and others out of the market, just as it pushed Netscape out of the Web browser marketplace in the late 1990s, the Commission and its allies say. But Microsoft says the existence of more than one version of Windows would cause confusion in the marketplace and tie its hands in trying to innovate.
That argument resonated with Vesterdorf, who asked sympathetic questions of Microsoft during the second day of the hearings, on Oct. 1 At one point, he expressed concern that choice might confuse consumers, who might return their computers to stores asking, "Why doesn't it work?"
Less important is regarded the judge's decision on the requirement that Microsoft share data on its software protocols with makers of work group servers, which are used in offices to access files and run printers. Microsoft has already agreed in the United States to license some of these protocols.
Whatever happens, Microsoft wants to re-open talks with the EU rather than wait years for a final favorable ruling. It has spent billions of dollars settling with former rivals who sued it for unfair practices and such an agreement would end the last major legal action against it.
"We're hopeful that the order will make it possible for both parties to re-start the dialogue," Horacio Gutierrez, the company's associate general counsel for Europe said last week.
That would require the European Commission to take the unprecedented step of changing a formal finding that was three years in the making and endorsed by 18 countries.
The new competition commissioner, Neelie Kroes, has yet to show her hand.