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Microsoft in fresh trouble

Brussels, Feb. 11 (Reuters): A computer trade group has filed a fresh complaint against Microsoft Corp. to the European Commission, alleging the latest XP version of Windows gives the software giant an illegal advantage that kills competition, sources familiar with the matter said on Tuesday.

The Computer and Communications Industry Association (CCIA) filed its complaint as Competition Commissioner Mario Monti and his staff near a decision over whether Microsoft committed illegal practices with older versions of its software.

The 260-page complaint says the commission should look at Microsoft’s tactics as an overall, coordinated effort designed to maintain a monopoly, instead of examining them piecemeal.

Microsoft chairman Bill Gates argued in the company’s US trial that competitors had no one to blame but themselves for marketplace failures and were trying to use the courts to gain an unfair advantage.

The CCIA said it is fighting for consumers, arguing: “Microsoft’s overwhelming dominance and its abuse of that dominance reaches into every corner of Europe and harms virtually every business and consumer who uses a computer.”

Microsoft spokesman Jim Desler described the complaint as “old arguments and allegations rehashed by a group that is cynically trying to influence the process.”

The CCIA says Microsoft has bundled a host of programs into its latest version of Windows. US courts found that Microsoft illegally used its dominance to crush browser rival Netscape and protect its Windows operating system.

CCIA argues that instead of a successful remedy, Netscape has been a cautionary tale to would-be competitors who have learned not to compete with products bundled with Windows.

“Alternatives are foreclosed through Microsoft’s bundling practices,” the complaint said. “Microsoft bundles an extraordinary array of products with Windows XP.”

XP bundles Internet Explorer and another browser, MSN Explorer, audio and video player Windows Media player, instant messaging software Windows Messenger, e-mail client Outlook Express and video editor Windows Movie Maker, CCIA says.

New competition

The CCIA wants Microsoft to break out the products it bundles with Microsoft so that new competition can develop. Ultimately, that competition could lead to a rival for Windows, the complaint says.

In the Washington case, Gates argued against a similar unbundling proposal by state attorneys general.

“By reducing Windows to some undefined ‘core operating system’ the (states) would turn back the clock on Windows development by about 10 years and effectively freeze it there,” he said in testimony delivered in April 2002.

In the end, US district judge Colleen Kollar-Kotelly ruled that the arguments raised by state attorneys general were beyond the scope of the original case.

Noting that, CCIA filed the new complaint with the European Commission saying that a solution needs to be forward-looking to prevent Microsoft from repeatedly using the same business tactics with new software.

Under EU law, companies in a dominant position have a special obligation to preserve competition because they have such a strong advantage in the market.

But CCIA says anti-competitive practices have prevented the Linux operating system from getting a toehold on the computer desktop. It said Apple Computer Inc. has a diminishing share now less than five per cent.

Gates and other company executives have said it was untrue the company used the Windows monopoly to thwart competitors like Linux and RealNetworks Inc., a maker of media players.

“It would be nice if they could work constructively with the rest of the industry, rather than focus exclusively on complaints and litigation,” Microsoft’s Desler said, “We look forward to working with European Commission.”

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