Microsoft seeks delay of anti-trust penalties

Microsoft told a judge yesterday that the European Commission must be stopped from ordering it to give up secret technology to…

Microsoft told a judge yesterday that the European Commission must be stopped from ordering it to give up secret technology to competitors.

The software giant is seeking the suspension of penalties imposed on it for violating antitrust laws by using its Windows operating system monopoly to hurt competitors.

The world's largest software company, which employs 1,200 people in Dublin, seeks the suspension until its court challenge of a Commission decision is completed years from now.

The Commission, the EU's executive, ordered Microsoft to make available its protocols, or software rules, to rivals so that their work group servers are on a level playing field when it comes to communicating with Microsoft desktop computers. Work group servers run printers and give access to files.

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"This is the first time in competitive history that a company has been ordered to draw up a description of secret technology and deliver it to its competitors," said Mr Ian Forrester, the lawyer for Microsoft, in an argument before the EU's Court of First Instance.

But a competitor, Samba, said Microsoft freely gave it protocols until its server software became popular and poured scorn on the idea Microsoft spent millions developing them.

"The protocols are not secret because they're valuable; they're valuable because they're secret," Samba co-creator, Mr Jeremy Allison, told the court.

He said that each time Microsoft updates its products, it can tweak the protocols so others cannot use them.

"Microsoft builds on the work of others but makes small but critical changes," he said, comparing it to a telephone company that will not tell competitors how to dial phone numbers.

In March, the Commission found that Microsoft used the power of its Windows operating system, which it said held a virtual monopoly in personal computers, to cripple competitors and ordered the company to change the way it does business.

The company argues that the order will impinge on its limited-time exclusive rights, including its patents, copyright and trademarks, and do it irreparable harm. The Commission says delaying the remedies will make them irrelevant.

The court president, Mr Bo Vesterdorf, is hearing at least two days of arguments before deciding whether to suspend the remedies. Microsoft, which must prove that the sanctions will cause it irreparable harm, said that giving its protocols to others could not be undone.

"That which is licensed cannot be unlicensed," Microsoft's Mr Forrester argued. "The bell once rung cannot be unrung." But European Commission lawyer Mr Walter Moells said that Microsoft had not shown harm.

"There is no case that Microsoft will irreversibly lose market share," he said. Mr Moells said licensing problems are routinely sorted out through non-disclosure agreements.

Yesterday's hearing was devoted to questions about the licensing of the server protocols.

Today, the judge will hear arguments over the Commission's order that Microsoft sell a version of its Windows operating system without Media Player audio-visual software to computer makers. -(Reuters)