The Telegraph
Since 1st March, 1999
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Microsoft in European showdown

Brussels, Nov. 12 (Reuters): Software giant Microsoft faced off with European regulators and rivals today at a showdown hearing to defend itself against allegations of abusing its market dominance.

After facing anti-trust probes in the US, the company built by billionaire businessman Bill Gates has been threatened with fines by EU competition chief Mario Monti, who could also order it to change its ubiquitous Windows software.

At a closed-door, three-day hearing in Brussels, Microsoft will try to fend off the commission’s accusations that it used its Windows system’s dominance of desktop operating systems to squeeze out rival software firms in the markets for playing music and video files and for running basic computer networks.

The commission is considering forcing the Redmond, Washington-based firm to remove its multimedia software from Windows and to tell rivals how to get Windows to work better with server software. A decision is expected in spring 2004.

As participants arrived for the meeting in a drab building in the EU quarter of the Belgian capital, one lawyer against Microsoft said the firm was not taking the matter seriously.

Michael Hausfeld, who has brought US class actions against Microsoft on behalf of consumers, said he will show a videotaped deposition of Microsoft chief executive Steve Ballmer to illustrate the company’s culture.

“We asked him — this is after Microsoft has undergone four investigations and one trial (on) two continents — if he has any understanding of the word monopoly,” Hausfeld, who practices in Washington, DC, said as he entered the building.

“He actually laughed and said: ‘Yes, I play it with my children’,” Hausfeld said. “I don’t think that's an indication of someone who takes his obligations seriously.” A Microsoft spokeswoman declined to comment on his remarks.

US courts have found Microsoft abused monopoly power it holds through its Windows system for personal computers.

Hausfeld’s presentation, set for tomorrow evening, is one of many in the hearing, which began with Microsoft’s presentation. The hearings run till 1900 GMT to fit everyone in.

“It is another opportunity to continue our discussion,” Microsoft general counsel Brad Smith said. Asked if negotiations with the commission would produce a settlement, he said: “Hope springs eternal.”

RealNetworks dominated file playing until Microsoft lumped Media Player into Windows, when its market share jumped.

With server software, the commission’s goal is to allow rival servers to connect as easily as Microsoft’s to desktop computers running Windows. The Financial Times said the EU probe could be extended to bundling of programmes within Windows XP, subject of a complaint by Microsoft’s rivals.

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