w00t! What a ride!

[Bill Sconce]

On Mon, 17 Sep 2007 13:55:06 -0400
"Ben Scott" <dragonhawk at gmail.com> wrote:

> On 9/17/07, Bill Sconce <sconce at in-spec-inc.com> wrote:
> > Microsoft's takeover of ISO thwarted ... considerable backlash
> > as the nature of the effort ... becomes known.[1]
> 
>   Anyone know if any of this is getting coverage in the mainstream
> press? Or even the mainstream IT press?  The sources given are, shall
> we say, not exactly unbiased. [...]  Has anyone outside of the geek
> community reported on Microsoft's latest tricks?


Janet just called, from out in the world, and says it's been all over
the radio.  (Of course, Janet is not exactly unbiased either.  :)

-Bill


P.S. "Mainstream" press?  Hm.  Wall Street Journal?  

P.P.S. EUR497 million, plus EUR3 million per day.  That could add
up to real money... 
__________________________________________________________________
http://online.wsj.com/article/SB119001194509829543.html?mod=fpa_whatsnews

EU Court Rejects Microsoft Appeal
  Decision Has Implications For Further Cases
  Involving Microsoft and Other Firms
By CHARLES FORELLE
September 17, 2007 1:09 p.m.

BRUSSELS -- One of Europe's highest courts handed Microsoft Corp.
a stinging defeat in its hard-fought antitrust case, dismissing nearly
all of the company's appeal of a landmark 2004 decision by the European
Union and upholding EUR497 million ($689.7 million) in fines.

The ruling by the European Court of First Instance endorsed in broad
strokes the EU's power to regulate dominant companies abusing their
market position.

Microsoft said it hasn't decided yet whether to appeal the ruling to
Europe's highest tribunal, the European Court of Justice. "We just need
to think about this. It's a serious and substantial decision and it
deserves serious thought rather than an instantaneous decision," Brad
Smith, the company's general counsel, told reporters in Brussels.

The latest ruling arms European antitrust authorities with strong tools
to further pursue Microsoft, if it chooses to, as well as other
dominant, high-tech players. The court, which sits in Luxembourg,
brushed aside Microsoft's arguments that its intellectual property
should provide protection from regulation and that high-tech
industries, by their fast-moving nature, should be treated with a 
different hand.

The court's ruling also moves Europe's antitrust jurisprudence further
away from that of the U.S., where regulators are less apt to view 
aggressive conduct by dominant companies as abusive.

EU antitrust commissioner Neelie Kroes said after the court's ruling
that she won't "tolerate continued noncompliance" by Microsoft. Ms.
Kroes said Microsoft's share of the software market is now "far too
much" to give competitors a fair chance to compete, and said regulators
want to see "a significant drop" in Microsoft's market share.

In Europe, abuse-of-dominance is forbidden by a section of the European
treaty known as Article 82. But courts have had relatively few
opportunities to outline Article 82's scope.

The Microsoft case represented a choice opportunity -- and the court
took it, saying the EU's executive arm, the European Commission, had
proceeded appropriately in drawing broad powers from Article 82 to 
move against the software giant.

The Microsoft case had two key components. The first was whether the
Redmond, Wash. software giant abused its dominant position by bundling
the Windows Media Player inside its Windows operating system. The EU
argued the bundling was illegal under European antitrust law since it
disadvantaged others who produced -- or might want to try -- a separate
media player. RealNetworks Inc., the maker of an alternative player,
joined that case but settled with Microsoft in 2005 for $761 million.

The bundling allegations resemble the crux of an earlier antitrust case
brought by U.S. authorities against Microsoft, which was built around
how the bundled Web browser was used against rival Netscape.

The case's other main component concerned protocols that allow other
manufacturers' servers to communicate with Microsoft machines in a type
of network known as a workgroup. These servers are commonly used for
tasks such as maintaining a directory of users and controlling their
access to the network, storing shared files and queuing documents for
printers.

In 1998, Sun Microsystems Inc. complained to the EU that Microsoft had
refused to share "interoperability" information it needed to let servers
running its operating system work with Microsoft-based computers.

That complaint touched off the EU's investigation; six years later, it
handed down its decision.

That landmark decision, more than 300 pages in length and the 
culmination of a six-year probe by EU officials, prescribed a harsh 
fine -- EUR497 million -- and ordered Microsoft to remove its media
player from the Windows operating system and share communications
protocols with rivals who wanted their machines to work with Windows
computers.

The decision reflected years of frustration on both sides. Microsoft
mounted a massive public-relations and legal campaign in Brussels; the
EU pushed back. Microsoft chief Steve Ballmer flew to Brussels for
settlement talks, but hopes of a settlement evaporated. Former
Competition Commissioner Mario Monti said he wanted a clear decision
from the EU to set a precedent in dealing with dominant high-tech firms.

Monday, the Court of First Instance upheld both the removal of media
player and the requirement to disclose the protocols. It also left the
EUR497 million fine in place. That suggests that further fines -- 
EUR281 million in 2006 for Microsoft's refusal to comply with the 
decision and a running levy of EUR3 million per day since August 2006
for excessive pricing -- will also remain in place, though they weren't
the subject of Monday's litigation.

The court did reject a minor part of the EU's case, saying the antitrust
regulator exceeded its authority when it created an outside trustee to
monitor Microsoft. The court also said Microsoft didn't have to pay for
the trustee.

The case -- so far -- means Europe has been more successful than the
U.S. at bringing antitrust action against Microsoft. A years-long effort
in the U.S. came close; in 2000 a federal judge, Thomas Penfield
Jackson, called the company "untrustworthy" and ordered it broken up.
But that decision was quickly overturned on appeal, and Judge Jackson
was admonished for extrajudicial conversations with reporters.

The government eventually settled in 2001, winning little more than an
agreement that would make it easier for computer makers to hide
Microsoft's Internet programs if they wanted to use versions made by a
competitor.

Microsoft today remains, by any assessment, a singularly dominant
company in a vital industry -- estimates of its market share for PC 
operating systems runs as high as 95%.

In Europe, the Microsoft result could embolden regulators to pursue
the software giant further. There is an outstanding investigation of
a separate complaint involving Microsoft's dominant Office productivity
software. In that case, a group backed by companies including
International Business Machines Corp. alleges that Microsoft shut
rivals out of the market with its tight control over the file formats
used by Word, Excel and PowerPoint to encode documents.

Also, the EU launched this summer cases alleging abuses under Article
82 against two other high-tech companies, chip giant Intel Corp. and
memory-chip maker Rambus Inc.

The alleged abuses are different in nature, and neither is directly 
related to Microsoft's troubles, though lawyers say the court's guidance
is likely to steer how the EU proceeds in them. Intel is accused of
dumping chips below cost and using rebates and marketing funds to compel
computer makers not to buy from rival Advanced Micro Devices Inc; the
EU says Rambus sprang a "patent ambush" on rivals by working with them
to form industry standards for chip design, then later claiming it had
patents on the designs and charging a high price for them.

Write to Charles Forelle at charles.forelle at wsj.com