U.S. lawmakers question EU Microsoft decision

Ten members of the U.S. House International Relations Committee are questioning the European Commission’s decision last Wednesday to fine Microsoft Corp. US$605 million for anti-competitive practices, saying the U.S. has sufficiently addressed Microsoft antitrust issues.

The lawmakers, five Democrats and five Republicans, sent the open letter Wednesday to European Union (EU) Competition Commissioner Mario Monti. In the letter, the lawmakers suggest the European Commission’s fine is unnecessary after the U.S. Department of Justice’s (DOJ) antitrust lawsuit and settlement with Microsoft. The DOJ’s actions “addressed and resolved the same matters” as the European Union investigation, the letter said.

“The (U.S.) court’s Final Judgment established a comprehensive regulatory scheme that not only resolved past conduct, but also created a detailed compliance structure to address future competitive concerns that might arise,” the letter said. “Because this exact issue was raised and resolved during the U.S. settlement, it should not have been an area of concern for the E.U.”

The letter notes that the U.S. and EU signed a 1991 antitrust cooperation agreement, and the European Commission’s fine was “difficult to understand” with the agreement in place. The antitrust agreement, strengthened in 1998, seeks to avoid conflict between the U.S. and EU on antitrust issues “where one nation clearly has jurisdiction,” the letter said. “We should also note that this case involves a U.S. company, that the complaining parties in the E.U. were primarily U.S. companies and that all of the relevant design decisions occurred in the United States,” the letter continued.

In addition to the fine, the European Commission (EC) also ordered Microsoft to offer a version of its Windows operating system without the Windows Media Player software within 90 days.

The fine will discourage U.S. companies from marketing their products in Europe, lawmakers said.

“This effort by the commission to address issues that were previously settled in the U.S. courts will undermine the global competitiveness of many U.S. firms, impede American job growth, and impair innovation in many U.S. sectors,” Representative Robert Wexler, a Florida Democrat, said in a statement.

A spokeswoman for Wexler, whose office drafted the letter, said the lawmakers hope the letter will prompt the EC to reconsider its fine.

The EC’s decision to write its own rules could force software companies to either write Windows-based software to the EU’s restrictive standard, “essentially dictating U.S. customer experience,” or to write two different versions for each piece of software, one for the U.S. and one for the EU, Wexler’s spokeswoman said.

“The issue is not the merits of the DOJ settlement,” she added. “It is the precedent set by potentially conflicting regulations.”

Two different versions of Windows operating systems would hurt small developers that are writing Windows-based programs, the spokeswoman added. Wexler had already heard from developers who would be affected, she said.

“While Microsoft has the money and resources to handle two versions, the small developers, who write the majority of programs people actually use in their day-to-day experience, do not have those kind of resources. Establishing two versions of an operating system means that all of these small U.S. developers now can’t sell their products in the EU without significant and costly revisions,” she said.

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Jim Love, Chief Content Officer, IT World Canada

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