The European Commission yesterday accused Microsoft of illegally crowding out the media player developed by its chief rival Real Networks.
On the second day of Microsoft's appeal at Europe's second highest court against a landmark anti-trust ruling made by the EU executive, commission lawyer Per Hellstrom said Microsoft's 1999 decision to bundle its own media player into Windows crushed Real Networks player.
"How can you compete with ubiquity," asked Mr Hellstrom, who pinpointed Microsoft's policy of tying its software into its operating system - which is used by 95 per cent of the world's desktop computers - as a key reason that Real Player has lost its lead in the market for media players.
"They [ consumers] are less likely to choose other media players because they already have one," said Mr Hellstrom at the hearing at the European Court of First Instance in Luxembourg. Microsoft disputed the allegation, arguing that competition in the market for media players had actually improved since 1999. It also strongly criticised the commission's antitrust ruling in March 2004 that forced the US software company to provide a version of its operating system without Microsoft's own media player installed.
The issue of bundling software applications such as media player into Windows is crucial to this case and Microsoft's future business model. The commission has already issued a warning to the firm about bundling critical new software applications in its next generation of Windows, Vista, to boost its monopoly.
The Irish judge on the 13-strong judicial panel, Judge John Cooke - who is due to write the draft judgment on the hearing - asked a series of questions of Microsoft and the commission on the issue of bundling media player into Windows.
Judge Cooke also honed in on several internal Microsoft memos offered to the court, which appeared to show that the company had decided to engage in tactics that critics compared to Microsoft actions found illegal by US courts. He asked whether the memos showed bundling was a "strategy to gain market share".
Microsoft lawyer Jean-Francois Bellis dismissed the memos, saying it was easy to interpret "just a few lines taken from a few isolated documents".
Today and tomorrow, the judges will review the commission's action over what it says was Microsoft's failure to provide information rivals needed to create software able to run with Windows as smoothly as Microsoft's own products.
Microsoft will argue that it has given plenty of server software information and that providing more would infringe its intellectual property rights over innovations that it has worked long and hard to develop.
