[LINK] Fury in US over Microsoft's EU slap

[Antony Barry]

From: http://www.theage.com.au/articles/2004/03/25/1079939782633.html

Fury in US over Microsoft's EU slap

By Garry Barker
Technology Editor
March 26, 2004



Rumblings of a trade war between the US and Europe echoed through the 
halls of power in Washington DC last night as politicians rallied to 
condemn the European Commission for the clobbering it gave Microsoft in 
a swingeing antitrust judgement yesterday.

The EC found the world's largest software company, fiefdom of Bill 
Gates, the world's richest man, guilty of abusing its dominant market 
position.

It is a judgment Microsoft has also suffered on its home ground but 
this time the penalties are huge and painful.

The EC has levied its heaviest-ever fine - €497 million ($A850 million) 
- and, worse, imposed restrictions on the Windows operating system 
designed to stop Microsoft from swamping its competitors in the 
burgeoning multibillion-dollar online entertainment market.

Protests erupted in the US capital within minutes of the judgement, led 
by Senate Republican Leader Bill Frist who, with other politicians, 
complained that the sanctions violated US-EU trade agreements and 
should be resisted by President Bush.

  "I fear that the US and the EU are heading towards a new trade war and 
that the commission's ruling against Microsoft is the first shot," Mr 
Frist said.

  "If the US Government does not make a clear and strong objection to 
the EU actions, we will lose influence and credibility for years to 
come, to the detriment of the US economy and US consumers," he said.

  Hewitt Pate, chief of the US Department of Justice's antitrust office, 
described the huge fine levied on Microsoft as "unfortunate". He said 
the European requirement that a version of Windows be marketed without 
Windows Media Player was a "chilling innovation".

  But Douglas Melamed, chief of the DoJ's antitrust division in the 
Clinton administration, said the EU's order made perfect sense.

"The commission did nothing that strikes me as outrageous or foolish," 
he said. The fine was appropriate; a good deterrent that "enables you 
to focus yourself on deterring wrongful conduct rather than trying to 
regulate it after you find it."

While Windows is by far the dominant operating system in Europe, as in 
the rest of the world, Microsoft's image, fair or not, is that of a 
bullying American monopoly.

  The fine, although double most expectations, is essentially peanuts 
for a company with $US53 billion ($A71 billion) in the bank. More 
damaging is the ruling by European competition commissioner Mario 
Monti, now ratified by the full 15-nation EU, that Microsoft lay bare 
for rival companies some of the most important programming code in its 
Windows operating system.

The company says it will appeal in Europe's highest courts. The case 
could drag on for years while Microsoft builds an unassailable position 
in online entertainment, as it did with its web browser.

Appeals are thought unlikely to succeed and, depending on the speed 
with which they are handled, Microsoft will have to start selling in 
Europe, a third of its global market, a version of Windows without WMP.

Real Networks, whose media player competes with WMP, and Sun 
Microsystems, long a Microsoft foe, both believe Europe's move would 
lead to lower prices and more variety for consumers.
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