Microsoft rivals line up to sue after EU ruling

Microsoft was last night facing the prospect of a raft of prosecutions brought by European competitors after the EU imposed a record ¤497.2m (£331m) fine on the software giant for anti-competitive behaviour.

Microsoft was last night facing the prospect of a raft of prosecutions brought by European competitors after the EU imposed a record ¤497.2m (£331m) fine on the software giant for anti-competitive behaviour.

Mario Monti, the EU's Competition Commissioner, said Microsoft should stop bundling certain types of software into its Windows operating system which, installed on 95 per cent of personal computers, was a "near monopoly". Microsoft was given 90 days to comply.

But the ruling triggered an angry response from across the Atlantic, where the US Senate majority leader Bill Frist denounced it as "preposterous".
"I now fear that the US and the EU are heading toward a new trade war ­ and that the commission's ruling against Microsoft is the first shot," Mr Frist, a Republican from Tennessee, said. The US Justice Department, meanwhile, described the fine as "unfortunate", warning the sanctions could have "unintended consequences" on innovation.

Mr Monti said he had limited the fine in deference to regulators in the United States and other countries. The fine represents 8 per cent of Microsoft's turnover in Europe, Africa and the Middle East, but is far short of the maximum the EU could have imposed. The ruling, Mr Monti added, would set a framework for resolving similar complaints already pending against Microsoft's latest operating system, Windows XP.

The EU also said Microsoft must, within 120 days, start providing rivals with sufficient data to allow them to create computer products with full "interoperability" with Windows-based computers and servers.

Microsoft said it would appeal against the decision, which could keep the case bound up in legal wrangling for at least four years. A first move will be to ask the European Court of First Instance for a stay of the EU's 90 and 120-day stipulations.

Nevertheless, lawyers for rivals claimed a significant victory over Microsoft yesterday. Michael Reynolds, the head of anti-trust at Allen & Overy, the lawyers for Sun Microsystems, the main complainant against Microsoft, said: "We will look at all the options. As the commissioner has said, all parties have rights in the member states of the EU. He said he was looking at the multiplier effect in terms of deterrents, not just of the fine, but also from private actions. There is a distinct possibility [Sun] may bring an action."

Mr Reynolds said the finding was a "landmark" decision that set important principles for business in the future.

Mr Monti said: "Today's decision restores the conditions for fair competition in the market concerned and established clear principles for the future conduct of a company with such a strong dominant position."

Mr Monti ordered Microsoft to offer a version of its Windows operating system without its Windows Media Player software bundled with it. Media Player allows PCs to play audio and video. He then said the company had to supply sufficient data to rivals to let them take advantage of his first ruling. This would allow them to provide rival products that could be fully integrated with Windows.

Microsoft last night insisted a settlement it had offered Mr Monti last week would have been better for consumers. A spokesman said: "We were offering all Windows-based PCs to be shipped with three rival versions of media player software on the hard drive plus a CD with all the others so people could choose for themselves." He said Microsoft had 70 days to appeal.