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Last Updated: Friday, 28 April 2006, 18:05 GMT 19:05 UK
Microsoft and EU await anti-trust verdict
By Theo Leggett
BBC Europe business reporter in Brussels

Lawyers featuring in the Microsoft hearing
The legal arguments are over European competition issues

This was a courtroom battle of two giants - the culmination of seven years of intensive investigations, legal arguments and media jousting.

In the end, the two sides could agree on very little - except that the outcome of the case will have huge implications for the future of the software industry.

At issue was whether or not Microsoft deliberately used its market power to try to force its rivals out of business.

It was the biggest investigation of its kind that the Commission had ever carried out - and two years ago it reached its landmark decision.

It said that Microsoft had deliberately denied its rivals the technical information they needed in order to make their own software work smoothly with Microsoft's Windows operating system.

It also claimed that by including audio and video programmes - media players - within the basic Windows package, Microsoft was effectively preventing rivals from having a market for their own media programmes.

Compelling arguments

Microsoft was fined a record 497m Euros and told to give its rivals more information on how Windows works, to enable them to make compatible products.

It was also ordered to make versions of Windows available without built in media players.

During the hearings both sides put forward compelling arguments.

Microsoft said the Commission's ruling effectively meant that it was being told to "give a worldwide licence in perpetuity" for its trade secrets.

It said the decision was "excessive, arbitrary and unreasonable" and undermined a key part of its business model.

Microsoft Windows on sale
Microsoft says the EC's ruling is unfair

It added that the ruling would remove the incentive to improve its products, and mean that consumers would get a worse deal.

But the Commission argued that it was Microsoft putting the brakes on innovation - arguing that no rival companies would launch new products if they thought Microsoft would simply develop its own version and include it in the next generation of Windows.

Rhetorical battle

It warned that if Microsoft were left to its own devices, it would use its dominance in the software market to squeeze its rivals again and again.

To many observers Microsoft had the better of the rhetorical battle, producing the better lines - one of its lawyers even describing the Commission's case as "like a jellyfish - shapeless and very painful".

But both legal teams had clearly done their homework - producing vast quantities of technical information to support their arguments, and using charts and slides to help make it digestible for the 13 judges.

The outcome of the case will be eagerly awaited at the Commission's Brussels headquarters, and at Microsoft's base thousands of miles away in Seattle.

Consequences

If Microsoft loses, its likely to face further legal assaults from the Commission.

But if it wins, the regulator is likely to find its credibility severely undermined.

With the courtroom drama out of the way, the judges will now consider the evidence before delivering their verdict - a process which is likely to take many months.

For both sides, the ruling can't come soon enough.


BBC NEWS: VIDEO AND AUDIO
The battle between Microsoft and the European Commission explained



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