The European Commission's order for Microsoft Corp. to share its code with rivals so their software can run smoothly with Windows takes central stage today in the third day of the company's bid to have its record fine and antitrust ruling overturned.
Microsoft says it has the right to guard its valuable intellectual property and control, but has maintained that it has worked strenuously to comply with the 2004 EU ruling that told it to pay a record €497 million fine.
But in December, the EU said the company had not done enough to help rivals develop compatible software and threatened Microsoft with daily fines of up to €2 million, backdated to Dec. 15. It has not yet decided whether it will levy these extra fines.
The ruling was handed down after a five-year investigation concluded that Microsoft had taken advantage of its position as the leading supplier of operating systems to damage rivals who offered server software and media player programs.
Lawyers for both Microsoft and the commission will expound on why the ruling should be lifted, or left unchanged, using evidence from IBM Corp., Novell Inc., Oracle Corp. and Sun Microsystems Inc. on systems compatibility.
None of those companies are currently involved in the legal battle although they are members of two broad industry coalitions — the European Committee for Interoperable Systems and the Software & Information Industry Association — that have backed the commission.
In a new complaint filed in February, the European Committee for Interoperable Systems said times have changed, but Microsoft's behavior has not. It claimed Microsoft is up to the same tricks — but on a wider scale.
The focus is remarkably different from the first two days of the five-day hearings. On Tuesday, the company brushed off the claims that it tried to squeeze competitors, including RealNetworks Inc., out of the streaming media market.
Instead, it argued before the 13 judges of the Court of First Instance that it merely added extra functions to its operating systems to meet likely demand from consumers — part of a natural process of evolution in the technology sector.
But its critics said that Microsoft was stifling innovation.
"This case is of vital importance for innovation," Per Hellstrom, a commission lawyer, said Tuesday. "Microsoft cannot be allowed to decide who can innovate and who cannot."
Microsoft lawyer Jean-Francois Bellis said that MediaPlayer had not hampered its rivals, citing the use of Flash Player as well as Apple Computer Inc.'s QuickTime and even its iTunes music service.
While a court decision on the ruling is not due for months, a decision backing the commission could force Microsoft to change the way it does business and endorse the EU's ability to hold back aggressive corporate behavior.
AP