Group items tagged

It ordered the software giant to untie the browser from its operating system in the 27-nation E.U.

The commission's investigation into Microsoft's Web-surfing software began a year ago, after the Norwegian browser-maker Opera Software filed a complaint. Opera argued that Microsoft hurt competitors not only by bundling the software, in effect giving away the browser, but also by not following accepted Web standards. That meant programmers who built Web pages would have to tweak their codes for different browsers. In many cases, they simply designed pages that worked with market-leading Internet Explorer but showed up garbled on competing browsers.

At the time of the complaint, Opera said it was asking E.U. regulators to either force Microsoft to market a version of Windows without the browser, or to include other browsers with Windows.

BRUSSELS (AP) — The European Union said Friday that Microsoft’s practice of selling the Internet Explorer browser together with its Windows operating system violated the union’s antitrust rules. It ordered the software giant to untie the browser from its operating system in the 27-nation union, enabling makers of rival browsers to compete fairly.

MEMO/09/15 Brussels, 17th January 2009

The European Commission can confirm that it has sent a Statement of Objections (SO) to Microsoft on 15th January 2009. The SO outlines the Commission’s preliminary view that Microsoft’s tying of its web browser Internet Explorer to its dominant client PC operating system Windows infringes the EC Treaty rules on abuse of a dominant position (Article 82).

In the SO, the Commission sets out evidence and outlines its preliminary conclusion that Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice. The SO is based on the legal and economic principles established in the judgment of the Court of First Instance of 17 September 2007 (case T-201/04), in which the Court of First Instance upheld the Commission's decision of March 2004 (see IP/04/382), finding that Microsoft had abused its dominant position in the PC operating system market by tying Windows Media Player to its Windows PC operating system (see MEMO/07/359).

European Union regulators are looking into whether mobile phone operators who block customers from making inexpensive wireless calls over the Internet are breaking competition rules. The European Commission, the EU antitrust authority, has sent questionnaires to phone companies asking what "tools" they use to "control, manage, block, slow down or otherwise restrict or filter" Internet-based voice calls. The EU deadline for responding to the survey was Tuesday. The questionnaire, obtained by Bloomberg News, does not identify any companies. Some mobile carriers have blocked services that use voice-over-Internet protocol, or VoIP, which allows users to make calls over the Web. Companies may be seeking to stop customers from accessing applications, like eBay's Skype, to defend voice revenue from the less expensive Internet services, Carolina Milanesi, research director for mobile devices at Gartner, the research company, said.

REDMOND – Jan. 16, 2009 – “Yesterday Microsoft received a Statement of Objections from the Directorate General for Competition of the European Commission. The Statement of Objections expresses the Commission’s preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law. According to the Statement of Objections, other browsers are foreclosed from competing because Windows includes Internet Explorer.

The Statement of Objections states that the remedies put in place by the U.S. courts in 2002 following antitrust proceedings in Washington, D.C. do not make the inclusion of Internet Explorer in Windows lawful under European Union law.

In a case of convenient timing, Opera Software's top developer happened to be in CNET's office just after Microsoft disclosed that the European Union has objected to Microsoft's bundling of a Web browser into Windows.

COMP/39.530 - Microsoft (Tying) Microsoft 14.01.2008 MemoAntitrust: Commission initiates formal investigations against Microsoft in two cases of suspected abuse of dominant market position 14.01.2008 Opening of Proceedings Concerns economic activity: C33.2

Did the Commission co-operate with the United States on this case? The Commission and the United States Federal Trade Commission have kept each other regularly and closely informed on the state of play of their respective Intel investigations. These discussions have been held in a co-operative and friendly atmosphere, and have been substantively fruitful in terms of sharing experiences on issues of common interest.

Where does the money go? Once final judgment has been delivered in any appeals before the Court of First Instance (CFI) and the Court of Justice, the money goes into the EU’s central budget, thus reducing the contributions that Member States pay to the EU. Does Intel have to pay the fine if it appeals to the European Court of First Instance (CFI)? Yes. In case of appeals to the CFI, it is normal practice that the fine is paid into a blocked bank account pending the final outcome of the appeals process. Any fine that is provisionally paid will produce interest based on the interest rate applied by the European Central Bank to its main refinancing operations. In exceptional circumstances, companies may be allowed to cover the amount of the fine by a bank guarantee at a higher interest rate. What percentage of Intel's turnover does the fine represent? The fine represents 4.15 % of Intel's turnover in 2008. This is less than half the allowable maximum, which is 10% of a company's annual turnover.

How long is the Decision? The Decision is 542 pages long. When is the Decision going to be published? The Decision in English (the official language version of the Decision) will be made available as soon as possible on DG Competition’s website (once relevant business secrets have been taken out). French and German translations will also be made available on DG Competition’s website in due course. A summary of the Decision will be published in the EU's Official Journal L series in all languages (once the translations are available).

The Commission found that Intel engaged in two specific forms of illegal practice. First, Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs. Such rebates and payments effectively prevented customers - and ultimately consumers - from choosing alternative products. Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products.

Intel awarded major computer manufacturers rebates on condition that they purchased all or almost all of their supplies, at least in certain defined segments, from Intel: Intel gave rebates to computer manufacturer A from December 2002 to December 2005 conditional on this manufacturer purchasing exclusively Intel CPUs Intel gave rebates to computer manufacturer B from November 2002 to May 2005 conditional on this manufacturer purchasing no less than 95% of its CPU needs for its business desktop computers from Intel (the remaining 5% that computer manufacturer B could purchase from rival chip maker AMD was then subject to further restrictive conditions set out below) Intel gave rebates to computer manufacturer C from October 2002 to November 2005 conditional on this manufacturer purchasing no less than 80% of its CPU needs for its desktop and notebook computers from Intel Intel gave rebates to computer manufacturer D in 2007 conditional on this manufacturer purchasing its CPU needs for its notebook computers exclusively from Intel.

Furthermore, Intel made payments to major retailer Media Saturn Holding from October 2002 to December 2007 on condition that it exclusively sold Intel-based PCs in all countries in which Media Saturn Holding is active.

Alfresco Software today announced the availability of Alfresco Labs (Beta) 3, the open source alternative to Microsoft® SharePoint®.  Alfresco Labs 3, formerly called Alfresco Community, offers Microsoft users greater choice by providing them with the first open source fully-compatible SharePoint repository.  With Alfresco Labs 3, companies can leverage existing investments in Linux and Java as well as Microsoft .NET connection software to significantly reduce their SharePoint total cost of ownership and maximize their hardware and software investments.  Alfresco Labs 3 will be available for download at http://wiki.alfresco.com/wiki/Alfresco_Labs_3

As regards interoperability, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies as regards interoperability disclosures. In the complaint by ECIS, Microsoft is alleged to have illegally refused to disclose interoperability information across a broad range of products, including information related to its Office suite, a number of its server products, and also in relation to the so called .NET Framework. The Commission's examination will therefore focus on all these areas, including the question whether Microsoft's new file format Office Open XML, as implemented in Office, is sufficiently interoperable with competitors' products. As for the tying of separate software products, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies. In a complaint by Opera, a competing browser vendor, Microsoft is alleged to have engaged in illegal tying of its Internet Explorer product to its dominant Windows operating system. The complaint alleges that there is ongoing competitive harm from Microsoft's practices, in particular in view of new proprietary technologies that Microsoft has allegedly introduced in its browser that would reduce compatibility with open internet standards, and therefore hinder competition. In addition, allegations of tying of other separate software products by Microsoft, including desktop search and Windows Live have been brought to the Commission's attention. The Commission's investigation will therefore focus on allegations that a range of products have been unlawfully tied to sales of Microsoft's dominant operating system.

Most likely, we grant you, it was coincidence. But we couldn’t help notice the timing: Two days after the DOJ’s new antitrust head, Christine Varney, publicly repudiates her predecessors by pledging to ramp up enforcement on so-called “single-firm” monopolistic behavior, the European Union takes a sledgehammer to Intel Corp., fining it $1.45 billion for alleged monopolistic activity. The fine is the largest ever assessed for monopoly abuse. Click here for the WSJ story, from Charles Forelle; here for the NYT story; here for the NYT story; here for the FT story; here for the Commission’s statement; here for Intel’s response.

John Pheasant, an antitrust practitioner at Hogan & Hartson in London and Brussels, told the Law Blog that some of the evidence does “not look very good for Intel,” adding that “if the facts are there, this type of conduct is more likely to be regarded as abusive if practiced by a dominant company. . . .”

On Varney’s statement from earlier this week, Kroes said the Justice Department’s stance gave her a “huge positive feeling. The more competition authorities joining us in our competition philosophy, the better it is.”

January 16, 2009 (Computerworld) Microsoft Corp. confirmed today that European Union regulators have formally accused the company of breaking antitrust laws by including the company's Internet Explorer (IE) browser with the Windows operating system. "Yesterday, Microsoft received a Statement of Objections from the Directorate General for Competition of the European Commission," the company said in a statement on Friday. "The Statement of Objections expresses the Commission's preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law." According to Microsoft, the EU claimed that "other browsers are foreclosed from competing because Windows includes Internet Explorer."

"If the Commission's preliminary conclusions as outlined in the recent statement of objections were confirmed, the Commission would intend to impose remedies that enabled users and manufacturers to make an unbiased choice between Internet Explorer and competing third party web browsers," Jonathan Todd, spokesperson for EU Competition Commissioner Neelie Kroes, told EurActiv.

This line stems from the mistakes the Commission recognised it had made by imposing remedies on Microsoft in the Media Player case (see background). Indeed, although Microsoft is now obliged to offer a version of Windows without Media Player, for the most part, users are opting for the readily available bundled offer, which provides extra software at the same price. "That remedy was rubbish," acknowledged an official in the Commission's competition department. 

In January 2008 the Commission opened a competition law investigation related to the inclusion of various capabilities in our Windows operating system software, including Web browsing software. The investigation was precipitated by a complaint filed with the Commission by Opera Software ASA, a firm that offers Web browsing software. On January 15, 2009, the European Commission issued a statement of objections expressing the Commission’s preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law. According to the statement of objections, other browsers are foreclosed from competing because Windows includes Internet Explorer. We will have an opportunity to respond in writing to the statement of objections within about two months. We may also request a hearing, which would take place after the submission of this response. Under European Union procedure, the European Commission will not make a final determination until after it receives and assesses our response and conducts the hearing, should we request one. The statement of objections seeks to impose a remedy that is different than the remedy imposed in the earlier proceeding concerning Windows Media Player.

While computer users and OEMs are already free to run any Web browsing software on Windows, the Commission is considering ordering Microsoft and OEMs to obligate users to choose a particular browser when setting up a new PC. Such a remedy might include a requirement that OEMs distribute multiple browsers on new Windows-based PCs. We may also be required to disable certain unspecified Internet Explorer software code if a user chooses a competing browser. The statement of objections also seeks to impose a significant fine based on sales of Windows operating systems in the European Union. In January 2008, the Commission opened an additional competition law investigation that relates primarily to interoperability with respect to our Microsoft Office family of products. This investigation resulted from complaints filed with the Commission by a trade association of Microsoft’s competitors.

But Intel could face even more payouts if Intel competitors, such as AMD, take civil cases on the back of the Commission's regulatory action, according to Alan Davis, an expert in competition law at Pinsent Masons, the law firm behind OUT-LAW.COM. "This will open the floodgates for competitors to sue," said Davis. "There was a complainant in this case, AMD [Advanced Micro Devices], and without question they and other competitors will pursue a case for damages." "The fine goes to the European Commission's coffers, not to the competitors who suffered damage to their businesses because of Intel's anti-competitive practices," he said. "What is likely to happen is that action will be started and a massive settlement will be made."

"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal." "We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don't perform the market acts accordingly."

"Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we're in compliance with their decision.