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ECommerceTimes.com

Microsoft Ditches EC Oral Hearing Plans in a Huff

By Erika Morphy
May 22, 2009 12:20 PM PT

Microsoft has withdrawn its request for an oral hearing over the latest antitrust charges levied against it by the European Commission. An oral hearing in the case is voluntary, and whether one is held should, theoretically, not impact its outcome. However, the EC's apparent inflexibility in accommodating Microsoft's request for a date change does not bode well for the company.

Microsoft Ditches EC Oral Hearing Plans in a Huff

In January 2008, in response to a complaint from Norway-based browser maker Opera, the EC began investigating whether Microsoft was violating European antitrust regulations by bundling Internet Explorer with its Windows operating system.

The EC's legal process begins with a statement of objections, which informs parties of the complaints against them. The next step is the oral hearing. After that point, assuming the EC confirms its preliminary finding and rules against Microsoft, it will have a number of remedies at its disposal, including the imposition of a fine and the ability to force Microsoft to cease bundling the two products.

Microsoft requested the oral hearing in March but later decided to withdraw it because the dates the EU set for its hearing coincided with the International Competition Network meeting, an important global intergovernmental competition law conference. This year, it is taking place in Zurich, June 3-5.

Many of the EU and national competition officials who would have been expected to sit in on Microsoft's oral hearing will be at the Zurich meeting, Redmond confirmed. It asked for another date, but the EC said a suitable room wasn't available at any other time.

No Room

"We believe that holding the hearing at a time when key officials are out of the country would deny Microsoft our effective right to be heard and hence deny our 'rights of defense' under European law," Dave Heiner, vice president and deputy general counsel wrote in his bluntly titled blog post, "Why hold a hearing in the EU if key decision makers are unable to attend?"

Heiner said Microsoft offered to find and outfit a suitable room if the EC would agree to reschedule the meeting.

It's impossible to say with any certainty whether this was a deliberate tactic on the part of the EC -- but the European community is clearly taking a harder line on perceived antitrust violations in general, said Scott Testa, a business and marketing professor at St. Joseph's University.

It just leveraged a US$1.4 billion fine against Intel, he noted -- another indicator of stepped-up enforcement.

"I wouldn't be surprised, in fact, if Google finds itself in its crosshairs at some point," Testa told the E-Commerce Times.

Indeed, the EU's pursuit of Microsoft and other U.S. companies for violating its competition laws has been going on for years, observed Raymond Van Dyke, a partner with Merchant & Gould.

"Many in the U.S. feel that U.S. companies have been unfairly treated in comparison to EU-resident corporations," he told the E-Commerce Times.

With President Barack Obama's revitalization of the antitrust divisions in the United States, Van Dyke continued, "we may see a resurgence of suits against market-dominant companies such as Microsoft over similar issues."

History Repeats Itself?

Leaving aside the prospect of more aggressive enforcement in the U.S., the rest of this particular chapter is not looking very favorable for Microsoft -- at least, if history is any guide.

Microsoft has already gone up against the EC's antitrust regulatory apparatus and walked away poorer as a result. In March 2004, for example, the EC ordered Microsoft to offer a version of its Windows client without Windows Media Player, after finding that bundling the products was a violation of European antitrust rules.

That was not lost on Microsoft's competitors, which have since joined the fray. Specifically, Google and Mozilla, together with several other firms, formalized their support for the EC's antitrust proceedings earlier this year by acquiring third-party status.

"Many competitors of Microsoft have taken their disputes to the EU in an effort to hobble Microsoft there," Van Dyke noted.


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