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Thursday, 30 August, 2001, 19:04 GMT 20:04 UK
EU launches fresh probe into Microsoft
Microsoft Windows 2000
Windows 2000 is at the centre of the EU probe
European Union regulators have launched a fresh anti-trust legal case against US software giant Microsoft.


Microsoft's actions may harm innovation and restrict choice for consumers

European Commission
The European Commission has accused the company of possibly violating competition laws by tying its Media Player product into its Windows operating system.

They have also accused Microsoft of trying to extend its strength in personal computers into other markets.

"The company is currently reviewing the commission's new statement, and believes that the new issues are discrete and limited in scope," Microsoft said in a respons statement.

"We are confident that once it has completed its investigation, the European Commission will be assured that we run our business in full compliance with EU law," Microsoft's Jean Philippe Courtois said in a statement.

Restricting choice

EU competition authorities are already investigating other possible market abuses by Microsoft.

Microsoft is also battling legal cases in the United States brought by the US government and 17 states.


Microsoft's fundamental strategy is to leverage their Windows monopoly into market after market

The Computer and Communications Industry Association (CCIA)
In June, a federal appeals court rejected a district court judge's ruling that Microsoft should be broken up into two companies.

But it did not dismiss the case entirely, sending the case back to a lower court for a new ruling on what punishment Microsoft should face for violations of anti-trust law.

That ruling is expected later this year.

In a statement, the European Commission said its latest investigation "adds a new dimension to the Commission's concerns that Microsoft's actions may harm innovation and restrict choice for consumers".

The Computer and Communications Industry Association (CCIA) praised the EU's decision to widen its two-year investigation into Microsoft.

"Microsoft's conduct is so pervasive and persistent that it is understandable that yet another antitrust enforcement authority has concluded that there is cause for concern.

"Microsoft's fundamental strategy is to leverage their Windows monopoly into market after market."

Extending dominance

Microsoft's Media Player allows users to listen to or watch "streamed" audio and video files, without lengthy download times. Its most popular rival is the Realplayer software from real.com.


Server networks lie at the heart of the future of the web and every effort must be made to prevent their monopolization through illegal practice

EU Competition Commissioner Mario Monti

The Commission is also concerned that Microsoft may be trying to extend its market dominance into cheaper computer servers used for printing, storing files and accessing the internet.

Such servers are normally used by companies to network personal computers, as well as web servers.

The Commission said Microsoft may have "withheld from vendors of alternative server software, key inter-operability information that they need to enable their product to talk with Microsoft's dominant PC and server software products".

'Free choice'

Competition Commissioner Mario Monti said: "Server networks lie at the heart of the future of the web and every effort must be made to prevent their monopolization through illegal practices.

"The commission is determined to ensure that the internet remains a competitive marketplace to the benefit of innovation and consumers alike."

The Commission said Microsoft may also be depriving computer makers and consumers of "free choice" over which media player they want to use by not providing means to uninstall the Media Player.

Already deteriorating

The CCIA said that while the case against Microsoft has been pending, the competitiveness of the server market has suffered badly as a result of Microsoft's alleged dominance.

It claims Microsoft's share of the market is approaching 60% worldwide.

"As a result of Microsoft's three monopolies - Windows, Office and Internet Explorer - Microsoft's server software has an enormous advantage over competing server software - even if the competing software is technologically superior or less expensive," a CCIA spokesman said.

Windows XP

A European Commission spokeswoman stressed that it was not investigating the latest version of Windows, Windows XP, as part of its probe into Microsoft.


At this stage the Commission is not conducting an investigation into Windows XP

EC Spokeswoman
"At this stage the Commission is not conducting an investigation into Windows XP," she said.

Microsoft has two months to respond to the Commission's charges.

The company can also request a hearing, which is expected to take place before the end of the year.

The Commission was not considering imposing any restrictions on Microsoft while the investigation is being carried out.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Joe Lynam reports
"Microsoft could be fined up to 10% of its annual turnover"
Michael McParland, international legal expert
"The [Competition] Commission is improving its bite"
See also:

29 Aug 01 | Business
Microsoft judge speeds up hearings
24 Aug 01 | Business
Microsoft case sent back to court
24 Aug 01 | Business
Microsoft ships Windows XP
06 Apr 01 | Business
Intel in EU competition probe
21 Jun 01 | Business
US and EU clash on competition
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