State Department questions EU's Microsoft ruling

The U.S. State Department has quietly expressed its concerns to European regulators about last week's decision to levy harsh penalties and a $613 million fine on Microsoft.

The quiet protest from the Bush administration comes as concern is growing on Capitol Hill over the European Commission's penalties, which came after the Justice Department agreed to a consent decree that includes ongoing federal court oversight of Microsoft's business practices.

"The State Department has been involved in an off-the-record attempt to focus their attention" on the harm the decision could bring about, a U.S. government official, who has direct knowledge of the concerns communicated to EU regulators, told CNET News.com on condition of anonymity. A State Department representative declined to comment.

U.S. politicians gave at least six speeches over a three-day period last week on the floor of the Senate and House of Representatives, all of which condemned European Competition Commissioner Mario Monti's ruling that Microsoft violated antitrust laws and would have to unbundle Media Player from Windows.

The strongest denunciation came from Senate Majority Leader Bill Frist, R-Tenn., who said, "I now fear that the United States and EU are heading toward a new trade war--and that the commission's ruling against Microsoft is the first shot.

"In imposing this anticonsumer, anti-innovation penalty, the commission has blatantly undercut the settlement that was so carefully and painstakingly crafted with Microsoft by the U.S. Department of Justice and several state antitrust authorities. The commission's complete indifference to the negative impact of its ruling on American jobs, American consumers and the U.S. economy, and its total disregard of the Department of Justice, are intolerable."

The European Union's sanctions against Microsoft are:

Too strong
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This is not the first time that the United States and the Europeans have clashed over antitrust enforcement. Hostilities erupted after the European Union vetoed the proposed General Electric-Honeywell merger, which U.S. regulators had already approved. President Bush publicly criticized the veto, which was widely viewed as a protectionist move designed to help European competitors such as Airbus and Lufthansa at the expense of U.S. companies.

Another point of contention is that U.S. officials sometimes view Europeans as unabashed fans of big government. In November 2001, William Kolasky, deputy assistant attorney general at the time, complained in a speech that the "European Union comes from a more statist tradition that places greater confidence in the utility of governmental intervention in markets."

Ten members of the House International Relations Committee--five Democrats and five Republicans--have written a letter to Monti protesting the sanctions on Microsoft. They claimed the decision violated the spirit of a 1991 "comity agreement" the Clinton administration renewed in 1998, which generally says that the United States should take the lead in overseeing U.S. companies.

[HughT]

Microsoft fined by EU

It is about time that somebody stopped the blatant abuse of the consumers and the law. Microsoft has done more to intrude on consumer privacy, charge exorbitant rates, kill all competition and hold back technological development than all other companies in the world combined. If the US insists on protecting these corporate crooks then it is good that the EU steps in.

[hutchike]

Real Networks investor backs Microsoft

Although I am an investor in Real Networks, I believe Microsoft should be free to add as many free features to Windows as it pleases. Real's Player 10 is excellent and will shine on its own merits. People can't access online Media without an internet connection, so consumers have no problem getting Apple's Quicktime or Real's Player 10 if they want to make the choice.

[Steven N]

I would put my money elsewhere

Hello,

I am a technical user, and I know where to find real player. But if I take a look at my mother-in-law, who has XP installed on her machine, she will never be inclined to look for Real Player. She's happy with what she has (MS media player), and that's it. And I think the same goes for 90% of the total windows userbase.
So this means the market for Media player is 90% of all Internet users, and the other companies can just play along, and keep up the appearance of competition.
The predatory conduct of MS has resulted in the fact that the opportunities for commercial products are reduced to practically zero. Companies can invest in a shining new application, but the moment a product becomes a little bit popular, MS grabs it, and puts it into Windows for free (very innovative BTW). And byebye for the chances of the original company to get some return from their investment. Lets see how many popup blockers and personal firewall applications will be on the market one year after XP SP2.
As a result of that Open Source is the only possible option, because commercial companies simply cannot afford investing into new products (except for some really big ones, and they are probably also not feeling safe). This is also the place where you find the real innovation happening.
Now, the decision of the EU will not do much to stop the current evolutions, but perhaps it will make the guys at Redmond think.
I am beginning to compare them with an alcoholic. Those people also believe they have no problem, unless something happens that makes them think. MS will also need that something to see they are having a problem in the way they are doing business.

[Earl Benser]

MS's 'Bundling'

MS should be free to offer whatever functions it wishes along
with it's Windows OS, but they should be independant
applications, not wired into the OS. MS's claims that the
programmig integration is necessary are pure marketing BS. IE
works fine as an independant app with the OS X operating
system. MS is just trying to to dominate everyone including Real.
That's clear in Europe - why the blinders in the US?

you're almost right...

I would agree with you... if Microsoft didn't have a desktop monopoly. But since that is the case, the rules should be different for them. Microsoft should be forced to unbundle their software, and shouldn't be allowed to promote their downloads unless they promote competitors as well. They're trying to use their control of the desktop & browser markets to monopolize other markets as well. The US DOJ found them guilty of anticompetetive activity but they got off with nothing more than a slap on the wrist. Good for the EU for promoting competition in the market and even better for them if they don't bow to international pressure to let Microsoft get away with it... again.

[gedcarroll]

USA should keep its nose out of Europe's business

The rationale that Europe should not regulate the way foreign companies conduct themselves is rediculous. What next American's abroad should have immunity from prosecution. The fact is that American technology companies will benefit from the ruling such as Real Networks, Apple and Sun Microsystems.

This unwarranted invasion of Europe's processes and procedures is offensive and unwelcome. When you need friends for things like the war on terror you shouldnt continually try to poke them with a stick in the eye.

[Steven N]

Already happened

" What next American's abroad should have immunity from prosecution."

It already happened... Last year, the US threatened Belgium with a lot of sanctions because of a Belgian law that allowed prosecution against anyone who commited crimes against humanity...

[rabberdoodle]

USA & EU business

It is fairly apparent you do not have the facts and your comments illustrate your ignorance of the facts.

That being the US does not believ the EU should not be able to regulate your business as that is what the WTO is for. Every country has the inalienable right to regulate and manage their business. Just as the EU wanted to levy fines against Microsoft.

You say that the "invasion" of the EU's procedures etc. is a bit hystronic, as the US is not "invading" anyone and the comment is meant to be confrontational. The fact is the EU levied the fine to begin with and understandbly there is the reaction to that from Americas.

To throw out the terrorism card is stupid and uncalled for. This is not about allies, Iraq the UK or whatever. It is about EU business only and not politics as you would have us believe.

Everybody thinks that a rich successful american company, should pay excessive fines that are based on some rather faulty assumptions. Protectionism will get us all nowhere as the American Army is the one who carried the load as always and will, look at how many Brits have died comparatively speaking....

It took the Europeans to take proper action against MSFT.

Having been involved in many antitrust cases over the years I have been dumbfounded by the lack of action against Microsoft. Nothing prevents Microsoft from offering bundled and non-bundled software or software which appears seamless when options or plugins are added. Microsoft has waved the flag of innovation in its defense, but the very policies established by the company choke innovation and we are generally stuck with one of the buggiest and unsecure operating systems ever designed always hoping (in vain) that the next version will be better.

I applaude the EU's stance and hope it is a sign of things to come.

Dan Bariault, Attorney and Business Professor

I totally agree

From my perspective it seems as if its more of an issue of pride than actual justice that is going on here. Europe, by stating an opposite judgement and actually carrying it out on Microsoft(we must remember that the USA did originally delegate a much more effective and painful judgement aiming at the division of the company...but failed to carry that out..) IS a slap in the face of the USA's microsoft-anticompetive-case-ruling. But hey, I think we needed that to wake up and realize that if we let software companies like microsoft dominate in the anticompetetive ways that they are it will affect a world economy of software and competition.

And the whole plea that MS has come up with that they are trying to defend innovation is the biggest lie since Martha Stuart's stock fiasco(but then again she IS paying for what she did, even though her actions have less of an impact on society than those of MS). In my opinion, the only inovation that microsoft is really defending is that of bundling. They want bundle-rights.


I doubt there is one person in the US that really believes that the final judgement issued to microsoft was anything fair at all but WHAT can we do? One might say vote for the guy that vows to fight against such bully-companies, but we have to remember that to actually see someone like that they have to go through the whole funding rally. And we all know that politicians are heavliy tempted to dance for those that pay them. And who can pay better than MS?

Inadequate US Remedy

The DOJ remedy was a hackneyed solution to the Microsoft
problem that left plenty of loopholes for further abuse.If the DOJ
remedy was so effective, why did Kodak have to sue? Why is
RealPlayer being pushed out? Also, why was MS let off with no
criminal penalties?

And Bill Frist has apparently become a Microsoft puppet,
spewing their nonsense about "innovation." That's one thing
Microsoft is definitely NOT known for.

[BarbieLee]

I thought EU gave MS a slap on the wrist

The EU fine against MS was nothing more than a slap on the wrist. Everyone knows Bill Gates and his MS wants to rule the world where everyone has to use his software for everything. And he has done a darn good job of crushing all the competition who has any software he desires as his own.

So far our government has contiued to play house with Bill and friends as they put out the story how good they are doing to make MS behave in the business world and stop eating those who it desires.

Ask Lindows how good a job MS is at playing fair. I imagine EU took that into consideration when they took a look at MS monopoly power plays.

If one has enough money, they can own our government in spite of who the voters put into office. Unless one has been living in another galaxy for the past hundred years, they know our government is bought and paid for by the special interest groups.
always
Barbie Lee

[Intelking]

read and reviewed ur comments

What are you guys that are complaining about MSFT is pure BS. Msft burned ibm in the 90's and did ibm come and sue MSFT for crushing their os 2, NO!!! IBM would not be here today (giant) if they took the same path as sunw & real are taking!!! the ones who are not innovating are sunw & real who are wasting R&D budget to innovate!!! U.S. and eu have and signed a comity agreement on these very issue's and not to mention all the complaints came from American companies and their products are made and reaserched in America!!!

[Frihet]

Leave MS Alone

The Legislative side of government grants software patents and practically perpetual copyrights while the Judicial side sues the resulting trusts and monopolies. Prices go up, innovation goes down, the congressmen and parliamentarians get their campaign money, the cartels and monopolies rake in the cash, and the lawyers have lots of work. Only the basic rights and interests of a vast majority of the world's people end up in the dumper. So the power center is fairly happy.

Patent, copyright, and trust law has been co-opted by special interests, so we can't expect anything useful to come out of the EU's posturing (as they simultaneously adopt DMCA-like law). Leave Microsoft alone and save the money (sorry lawyers). The only way out of this mess is to rewrite today?s patent and copyright law so as to restore competition and innovation to an absolutely scary technology and intellectual property domain. Rewriting this corrupt pile of legislation will take time and action at the ballot box. Elections are coming up in the U.S., so take heed. The fix starts with you.

not sure what to think

On one hand, it seems to me that "the design" of windows is Microsoft's problem. What they've done to "integrate" technology into windows isn't technological, it's political. They could easily have the same level of integration yet still be able to easily remove window's media player. On the other hand, it seems to me that this would set a precedent that the government can decide if the underlying design of a technology is acceptable. So, while I think that Microsoft brought this upon itself, I'm also afraid of the potential implications of this decision when it comes to making future ones.

[mpotter28]

GWB is always right

sorry that was supposed to read GWB always ready to fight. The sad thing is he does it with his neighbours (the world is rather small). It would be one thing if this was just a little politics for home consumption but there are enought true believers( idiots??) on both sides to actually cause problems. Microsoft is certainly strong enough to ride out this problem on its own but what about some small company. All it takes is one stupid law pushed by some stupid politician on either side to delay you with 6 months of red tape. How many empoyees are you going to lay off , can you even save the company ( to bad you were really ready for that next big growth step).

***"GENTLEMEN LETS GET READY TO RUNBLE"***