European anti-trust case against Microsoft falters

By Steve Malone

Posted on 24 Nov 2004 at 10:21

The judge hearing the Microsoft appeal against this year's anti-trust ruling has taken the unusual step of calling a meeting of the parties involved.

The European Court of First Instance's President Bo Vesterof is said to want to discuss the implications of the withdrawal from the case by two of Microsoft's most intractable opponents, the industry trade body the Computer and Communications Industry Association (CCIA) and Novell.

Microsoft is appealing against a ruling by the European Commission that it acted improperly by using its monopoly of the Windows desktop operating system to force other companies from related markets in server operating systems and media players. The Commission ruled that Microsoft should pay a record €497 million and open up its code to rivals.

On November the 8th Microsoft announced that it would pay Novell $536 million over the alleged malpractice over its attack on Novel's Netware. Microsoft also announced that it had settled its differences with the CCIA. It would appear that not only have the organisations withdrawn from the case but have also withdrawn their submissions to the court

The International Herald Tribune quotes an anonymous source as saying 'It is very unusual for a party withdrawing from a case to withdraw the evidence it has already submitted to the court.'

Following the meeting President Vesterof will need to decide whether to suspend the Commissions' remedies pending the outcome of the appeal. Before the settlements, both the CCIA and Novell had argued that to do so would allow Microsoft to spin the appeal process out over many years whilst being permitted to carry on as before.

Meanwhile, new light has now been thrown on that surprising settlement with the CCIA which had a long history of opposition to Microsoft's monopolistic practices. The Financial Times is reporting that Ed Black the CCIA President, who was one of Microsoft fiercest critics in the anti-trust case, received $9.75 million from the Microsoft settlement with the organisation.

Under the terms of the settlement Microsoft agreed to join the CCIA and pay 'certain legal-related expenditures it has incurred'. Microsoft also said it would 'provide substantial institutional support for new and important policy undertakings' by the CIAA. Neither any cash terms of what the new policy undertakings might be were revealed.

In return, the CIAA agreed not to appeal to the US Supreme Court over the final anti-trust settlement there, not to participate in Microsoft's appeal to the European Court of First Instance and to withdraw a separate complaint to the European Commission on issues related to Windows XP.

According to the FT, Microsoft paid the CCIA $19.75 million for its trouble of which Mr Black appears to have pocketed half. The payment to Mr Black was approved by the CIAA board. The FT says that neither Microsoft nor the CCIA would comment on its report.

At the time of the announcement with Microsoft, Black said 'Life is a constant reordering of priorities, and for important and pragmatic reasons we are choosing to move on with regard to this matter,' Black said. 'Neither I, nor CCIA, can recant the many things we have said and filed relating to Microsoft. Although we know and value the important role we have played on this matter over the years, there are other current and emerging matters which demand our attention.'