MS ANTITRUST : EU Microsoft guilty ruling takes shape

The shape of a probably guilty ruling in the five-year-long European Union (E.U.) antitrust case against Microsoft Corp. emerged this week, following a leak from an internal panel reviewing the handling of the case.

A source close to the European Commission’s (EC) competition department said Wednesday that a report on Reuters on Tuesday was “along the right lines.” The source insisted on remaining anonymous.

Just as in the U.S. case, the E.U. ruling will find Microsoft guilty of violating antitrust laws, the report said.

As in the U.S. case, the difficult part is what to do about it, and this is where the case handlers and the so-called devil’s advocate panel, a group of knowledgeable officials from within the Commission’s competition department, cannot yet agree, according to the Reuters story.

Case handlers want to require Microsoft to unbundle Media Player, an audio/video software program sold in the Windows packages. They also want the company to disclose more proprietary information about Windows to its rivals. The information is needed to ensure seamless interaction between, say, a PC running Windows and a computer server running Sun Microsystems Inc. server software.

The panel of devil’s advocates is understood to be urging the case team to tighten up the wording of their ruling because they are worried about it from both a legal and a technical standpoint.

This panel has been established recently to avert more humiliating defeats in the European Court of Justice. Three important merger rulings by the E.U. were overturned by the court last year. The judges in each case highlighted sloppy economic analysis and procedural errors in Commission rulings.

Now that the European Commission is approaching the final leg in the biggest antitrust case the Union has ever handled, it is not surprising that the devil’s advocate panel should scrutinize the case closely, the source said.

The only element missing is the fine Microsoft faces, but the fine isn’t decided until the final week or days before the final Commission vote to adopt the ruling, which is expected in June or July this year. In theory it could total 10 per cent of Microsoft’s annual global sales.

The Commission has never come near to fining that much, the person said, adding, “but then it has never come near to such a colossal antitrust case.”

The Commission declined to comment for this story.

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