Day 2 Goes to Microsoft

A panel of European judges has turned a skeptical eye toward the European Commission’s ruling that Microsoft isn’t playing fair.

In the second day of the software giant’s appeal of the $613 million EC antitrust ruling, a European Union panel asked whether bundling of a media player actually harmed competition, as regulators charge.

Today’s questioning follows the testimony traded between Microsoft and its rivals Monday on the state of competition for media software and
whether an EC-mandated version of Windows XP sans Windows Media
Player fell on deaf ears.

Judge John Cooke and Bo Vesterdorf, the
president of the European Court of First Instance, the EC’s second-highest legal body, sit on the panel.

Vesterdorf told the courtroom he, like other consumers, has
downloaded software without a problem, according to Lars Liebeler,
antitrust lawyer for industry group CompTIA.

Liebeler, who testified
Monday, said today’s questions “were mostly skeptical” and “cast
serious doubt” on the commission’s argument that bundling Windows Media
Player with the OS prevents consumers from using a third-party media player.

A key focus of the appeal is whether Windows Media Player is an
integral part of the OS. Microsoft testified yesterday that its media player is so integral that OEMs refused to install an EC-required mandated version of XP that removed the media player.

The EC and
Microsoft rivals believe the media player is a separate application
that can be removed and replaced without harm.

Cooke said it was likely impossible to buy a car without also
getting a cigarette lighter included. Monday, Microsoft used a similar analogy.

“The fact that laces are sold separately from shoes does not
demonstrate that shoe manufacturers are engaged in a tying practice
by selling shoes with only laces,” said Jean-Francois Belling,
Microsoft’s lawyer, said Monday.

Microsoft’s belief that its media player is a feature improving
the Windows experience is false, according to the European Committee
for Interoperable Systems (ECIS), a group that includes rivals Adobe, Oracle and Sun.

Under questioning, Microsoft admitted Windows Media Player is
offered as a stand-alone product, according to an ECIS statement.

The ECIS, which supports the EC’s antitrust ruling, said Microsoft’s contention of strong competition and availability of third-party media players was of “dubious quality” and supported by statistics available only to
the software maker.

“No company is above the law,” EC spokesperson Linda Cain told If you want to do business, said Cain, “you
have to respect European law and in particular European antitrust law.”

The EC is still considering whether to fine Microsoft for failing to
comply with demands the software company license technical information to rivals, according to the spokesperson.

In March,
Microsoft explained to the EC why regulators should not impose daily
fines for noncompliance with the European demand.

The commission is also monitoring whether Microsoft continues to
sell Windows XP N, a version of the operating system that omits
Windows Media Player.

Only 1,787 copies of XP N were sold in Europe, compared to the more than 35 million full versions of the OS that were sold in Europe during the
same time period, according to Microsoft.

“For as long as they do not comply in full, the commission will
not let the matter drop,” according to Cain. The EC, not Microsoft,
will decide when the software firm is in compliance, Cain said.

So far, no surprises have sprung from the appeal, says Laura
DiDio, a Yankee Group analyst. The court will be more favorably
disposed to the EC, DiDio believes.

While the process is scheduled to last through Friday, the court
told participants the hearing may extend to Saturday, according to

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