BBC News | BUSINESS | EU probes Windows

BBC News Online: Business

Wednesday, 9 February, 2000, 20:32 GMT

EU probes Windows

EU Competition Commissioner Mario Monti has made a "formal request" for information from Microsoft regarding its new Windows 2000 operating system - the first stage of a possible anti-trust investigation.

He said the probe followed allegations that Microsoft could extend its dominance to server operating systems and electronic commerce.

Windows 2000, which is due to be launched on 17 February, is crucial to the future success of Microsoft. It will replace the Windows NT system used by businesses.

Whoever gains dominance in the software server market gains dominance in electronic commerce too
Mario Monti, EU Competition Commissioner

Mr Monti said: "I've given the green light to start an examination into certain new features of Microsoft's next-generation operating system."

The Commission is concerned, he said, that "Microsoft has designed parts of Windows 2000 in such a way which will permit it to leverage its dominance in PC operating systems into other markets.

EU Competition Commissioner Mario Monti

"Whoever gains dominance in the software service market gains dominance in electronic commerce too," Mr Monti added.

Mr Monti said that should the allegations prove true, Microsoft would have to modify the program and could face heavy fines.

Microsoft denies allegations

Microsoft said that it was co-operating fully with the EU, but refuted allegations that it planned to dominate the server market, used by computers which are linked to the internet.

"There is a great deal of competition in the server market," Microsoft's John Frank, told the BBC.

He said that the company enjoyed an excellent relation with the Commission, and accused Sun Microsystems, one of Microsoft's main rivals in the server market, of initiating the complaint.

Mr Frank, who told the BBC that informal discussions had been going on with the EU since last year, argued that Windows 2000 did not bundle its desktop and server systems.

For example, users could have a Sun Java server and still use Windows 2000 on their desktop.

The news wiped more than $10bn off the value of Microsoft's shares - but it is still the world's most valuable company, worth more than $500bn.

In the dock

The Commission's concern arose from information it received from end-users, small and mid-sized businesses in the information technology sector.

Microsoft is being sued in the courts by the US Government for abusing its monopoly position by trying to force computer makers to bundle its internet browser, Internet Explorer, along with its other software.

In a preliminary finding of fact, Judge Thomas Penfold Jackson ruled that Microsoft was abusing its monopoly position within the industry.

If the two sides cannot reach agreement, a final ruling of law will be issued that could lead to the break-up of the company.

It is not the first time Microsoft has been accused of a monopoly behaviour in Europe, either.

In December, a European court ruled that the EU had been wrong to dismiss an earlier complaint from a small French software company, wholesaler Micro Leader Business (MLB), that Microsoft had abused its market position.

Big new launch

Microsoft claims that its new software is the best "business operating system for the next generation of personal computing."

"From the desktop to high-end clustered servers, the Windows 2000 product line lets you Internet-enable your business, strengthen system reliability, cut costs with improved management, and take full advantage of new hardware and communication products," the Microsoft website said.

Microsoft has gained a major boost each time it launched a new operating system. Windows 95, in particular, was widely regarded as a great success which secured the company's position as the dominant supplier of personal computer software.

It now wants to repeat that success in the business market.

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Internet Links: Microsoft Windows 2000 website European Union Microsoft
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