MS ANTITRUST : E.U. Microsoft ruling could set precedent

With the breakdown of settlement talks between the European Union and Microsoft Corp., the stage is set for the E.U. to announce next Wednesday a series of antitrust remedies and declare that the software company is an abusive monopolist, thus setting a precedent that will make it easier to prosecute other complaints, including several that are already under investigation.

The expected Wednesday announcement would close one chapter of a series of investigations that have been years in the making. However, a planned company appeal, and the other antitrust inquiries into Microsoft business practices, mean that the software giant might be dealing with antitrust issues in Europe for years to come.

Announcing the breakdown of settlement talks Thursday, European Competition Commissioner Mario Monti said in a news conference that European regulators and Microsoft were unable to agree on commitments the company must make for future conduct.

“The public and competition would therefore be better served by a decision setting a strong legal precedent which establishes clear principles for a company that is so dominant in the market,” he said

European regulators will propose that the European Commission, the E.U.’s executive body, issue a decision Wednesday on the case, which revolves around complaints that Microsoft abused its monopoly in desktop operating systems to stymie competitors in the media player and server software market.

Rivals Sun Microsystems Inc. and RealNetworks Inc., as well as the Computer & Communications Industry Association (CCIA), all said they look forward to a strong decision condemning Microsoft.

“Unfortunately, in and of itself, this ruling won’t rein in Microsoft. However, it lays a foundation for other measures that could,” said CCIA President and Chief Executive Officer (CEO) Ed Black. “This ruling will set an important precedent. The fact that (Monti) is putting a high value on the precedent means that the Commission intends to use it.”

The CCIA filed a broad complaint against Microsoft with the Commission in February last year. A ruling against Microsoft next week would help the CCIA’s case, Black said. “With formal precedents established and rulings made, it makes it a lot easier to accelerate other complaints,” he said.

The Wednesday ruling is expected to force Microsoft to sell two versions of Windows to PC makers in Europe: one with Media Player and one without, sources close to the case said. The Commission is also expected to require Microsoft to share some Windows code with rivals. In addition, the European regulator will fine Microsoft between

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