[Am-info] Europe plans tougher line than US on Microsoft

[Gene Gaines]

Interesting story from the Financial Times this morning.

See:
http://news.ft.com

and click on the Microsoft story.

Here is the text.

Europe plans tougher line than US on Microsoft
By Francesco Guerrera and Birgit Jennen in Brussels
Published: May 9 2002 21:20 | Last Updated: May 10 2002 06:21

Microsoft faces having to make radical changes to meet European
regulatory concerns that go well beyond what is being demanded of
it in the US.

After a three-year investigation, European antitrust regulators
are studying wide-ranging measures to prevent Microsoft from using
its strong position in the software market to injure competitors,
according to people familiar with the case. They are said to be
minded to take a tough line against the company, though final
decisions have not been taken.

The measures under consideration would force Microsoft to change
the way it produces and sells its Windows operating system and
Media Player software, and to provide a large amount of technical
information to competitors.

They would go well beyond the terms of last year's settlement
between Microsoft and the US government, which also investigated
the company's alleged anti-competitive practices, and could
further sour relations between the two antitrust authorities
following last year's high-profile spat over General Electric's
43bn takeover of Honeywell.

William Kolasky, who heads the US antitrust division's
international affairs, this week said monopoly leverage cases
remained an area where European Union policy had been "unduly
protective of competitors", a thinly veiled reference to the
Microsoft case.

People familiar with the matter said Mario Monti, European
competition commissioner, and his officials had still not decided
what measures to impose on Microsoft. They warned that discussions
were still at an early stage and any decision on possible fines,
which could total up to 10 per cent of Microsoft's turnover, was
months away. Microsoft and the commission declined to comment.

However, it is understood that the authorities are considering
asking Microsoft to separate its media software Media Player from
Windows.

Microsoft's rivals, led by AOL Time Warner, have alleged that
incorporating Media Player as a standard feature of Windows gave
the software an unfair advantage over rival programs, such as Real
Networks' Real Player. Microsoft rejects the allegations.

One solution being studied in Brussels would be to allow computer
makers to choose between a Windows with Media Player and one
without it.

Such a move, which would force Microsoft to produce a slimmed-down
version of Windows, is much more radical than that favoured by the
US company. Microsoft is understood to be willing to negotiate a
solution similar to that agreed with the US government and some
states, which allows computer makers to hide the Media Player icon
from desktops but not to remove the entire program.

The commission is also considering asking the company to provide a
host of technical information to rival makers of servers - large
computers that are the gateway to the internet and e-commerce.

Gene Gaines
gene.gaines@gainesgroup.com
Sterling, Virginia