Another Strike For Microsoft EU Defense

UPDATED: It’s not the sort of send-off Microsoft was hoping for as it prepares to appeal its European antitrust decision.

The company said it will end attempts to gain EU information from U.S. companies, following a New York court’s rejection of the its appeal to
subpoena IBM.

New York judge Colleen McMahon called Microsoft’s subpoena a
“blatant end run” on EU authority, according to court papers obtained
by internetnews.com.

The New York court said the subpoena request was “unduly intrusive
and burdensome” on IBM and the EU since the subpoena asked for
attorney notes of conversations with the EU.

McMahon also said the
request would pit the court against the EU, rendering the EU’s
“proceedings meaningless,” according to the decision.

Microsoft’s request was deemed “both unnecessary and improper”, as
well as undermining laws discouraging countries involving themselves
in foreign courts, according to the decision.

The court loss follows a denial earlier this week by a Boston judge of a similar Microsoft request for EU-related
documents from Novell.

In that decision, Massachusetts judge D.J.
Wolf quashed the subpoena, finding Microsoft didn’t make its case.

“Microsoft has not demonstrated that the commission’s procedures are
fundamentally unfair,” Wolf wrote.

Microsoft had argued it needed information from Novell, alleging
the EU’s Statement of Objections used testimony from competitors.

Although Microsoft had planned to appeal a third defeat handed
down last month, the company decided not to appeal a California
federal court ruling rejecting the software company’s request Oracle
and Sun turn over EU-related material.

Instead, Microsoft is anticipating next week’s EU appeal process.

“The writing is clearly on the wall for these actions, and we will
not be pursuing them any further,” said Stacy Drake, a Microsoft
spokeswoman, in a statement to internetnews.com.

“In the last
few weeks, we have received some clarity from the commission and the
monitoring trustee that has been very helpful,” said Drake.

Microsoft spokesman Jack Evans said in a statement that the company is looking forward to presenting its case to the Court of First Instance.

In the balance is whether companies can improve their
products by developing new features, and “whether a successful
company must hand over its valuable intellectual property to
competitors,” Evans said.

Evans refuted the EU claim that Microsoft domination hurts
competition.

“There is healthy competition and interoperability in
all the markets covered in this case and we will bring those facts to
the court next week,” according to the spokesperson.

Following last month’s still-undecided hearing on whether the
EU should continue assessing Microsoft daily $2.4 million fines for
noncompliance with a 2005 ruling, both parties seemed to see common ground.

At the time, Microsoft
lawyer Brad Smith characterized the hearing as bringing “constructive
dialogue” and left optimistic: “I wish we could have had this type of
dialog sooner,” he said in a statement.

“I don’t see much common ground at all,” said Joe Wilcox, a
JupiterResearch analyst. “Where they differ is fundamental.”

Even before next week’s hearing, speculation has begun about what
impact the long-running court battle might have on the already-delayed Vista operating system.

Last month, the EU said it may investigate Vista’s bundling practice, and it was Microsoft’s
responsibility to answer questions.

“It is in Microsoft’s own interest to clarify these issues as soon
as possible so as not to have any doubts about the legality of Vista
hanging in the air,” EU spokesperson Jonathan Todd told
internetnews.com at the time.

While Wilcox isn’t sure whether Vista will be pulled into the
anticompetitive debate, the process may be different this time around.

Because of the mountain of evidence the EU has compiled in the
original case, any challenge to Vista could be speedier, believes
Wilcox.