EU Expands Microsoft Investigation

Aug 30 2001

BRUSSELS - The European Commission confirmed Thursday that it is merging its two antitrust investigations into Microsoft's operating systems.

"This Statement of Objections supplements one sent to the company a year ago and adds a new dimension to the Commission's concerns that Microsoft's actions may harm innovation and restrict choice for consumers," the Commission said in a statement.

The European Commission, the executive body of the European Union, says Microsoft may have violated European antitrust rules by "using illegal practices to extend its dominant position in the market for personal computer operating systems into the market for low-end server operating systems."

The commission described low-end server systems as cheaper servers that are usually used as file and print servers as well as Web servers.

Microsoft has about two months to reply in writing to the latest statement of objections, "which is now merged with the existing procedure triggered by a Sun Microsystems complaint," the Commission said.

The first case was sparked by a complaint by Sun Microsystems in 1998, alleging that Microsoft was using its Windows operating system software to muscle rivals out of the market for server software. It focused on Microsoft's alleged discriminatory licensing and refusal to supply the software information that would allow rival server products to work with older versions of Microsoft's Windows operating systems.

In February 2000 the Commission launched a separate investigation on its own initiative to determine whether Microsoft was doing the same thing with the latest version of its OS software, Windows 2000.

As with the first case, the Commission believes that Microsoft may have withheld from vendors of alternative server software key interoperability information that the vendors would need in order to enable their products to communicate with Microsoft's dominant PC and server software products.

Microsoft may have done this by refusing to reveal the relevant technical information, and by engaging in a policy of discriminatory and selective disclosure on the basis of a "friend-enemy" scheme, the Commission said.

The Commission says it is also investigating allegations that Microsoft is illegally tying its Media Player product to its dominant Windows operating system.

"Microsoft may thereby deprive PC manufacturers and final users of a free choice over which products they want to have on their PCs, especially as there are no ready technical means to remove or uninstall the Media Player product," the Commission said.

"Competing products may therefore be at a disadvantage which is not related to their price or quality and the result is a weakening of effective competition in the market, a reduction of consumer choice, and less innovation," the Commission said.

Paul Meller writes for the IDG News Service.