Is security the next antitrust battle for Microsoft?

Microsoft Corp.’s moves into the security software market could be an agitator for more antitrust concerns over how it uses its market strength for other software offerings.

Last week, the Redmond, Washington, company announced a new product for businesses called Microsoft Client Protection, a beta version of which will be released before the end of the year. Also in the pipeline is Windows OneCare Live, an antivirus and spyware product for consumers due for a public beta release later this year.

The products are the fruit of Microsoft’s commitment more than two years ago to offer antivirus products, which included acquiring antispyware technology and firms such as Sybari Software Inc. earlier this year and the Romanian antivirus software developer GeCAD Software SRL in 2003.

One European antitrust lawyer sees the move into security software as another attempt by Microsoft to take advantage of its strength in operating systems in order to extend that strength into neighbouring markets. “It’s the classic issue of what is the end of the legitimate scope of Microsoft’s dominance,” said Anthony Woolich, head of the European Union competition team at Lawrence Graham LLP in London.

Microsoft’s Windows Vista OS will have security features that help protect computers from viruses, worms and spyware, according to the company’s Web site. But what security features will be in Vista and how those are tied to the operating system and interact with other products could be key.

The company plans to sell OneCare as an add-on annual subscription for Windows XP and Vista, said Rebecca Smith, spokeswoman, in an e-mail response to a query.

Complaints against Microsoft in the European Commission last year showed that if a product can be sourced independently, “that would suggest it is a separate market,” Woolich said. It would mean that a potential argument that security features are an integral part of an operating system may not apply in an antitrust battle, Woolich said.

Symantec Corp. said last week that it has provided information to the European Commission. Jonathan Todd, spokesman European Union Competition Commissioner Neelie Kroes, said Friday that as a matter of practice he can’t confirm ongoing investigations by the Commission.

Symantec Chief Executive Officer John Thompson on Tuesday confirmed documents were given to the Commission but sought to dampen speculation that a court fight was brewing. Symantec’s relationship with Microsoft is one of “mutual dependency,” he said, and that the company is not involved in a Commission investigation.

An earlier investigation into software bundling led, in May 2004, to the Commission ordering Microsoft to sell a version of Windows without its Media Player software and to offer licensing protocols used by its workgroup server software. The company was fined a record

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