Fresh on the heels of the approval last November of its settlement in United States v. Microsoft Corp., 20 U.S. Dist. LEXIS 21097 (D.D.C. 2002), Microsoft now faces a new antitrust challenge, this time in Europe.  On February 11, 2003, the Computer & Communications Industry Association ("CCIA"), a coalition of computer, telephone and Internet companies, confirmed that it filed a formal complaint with the European Commission in Brussels against Microsoft. 

In its complaint the CCIA seeks intervention by the EC to restore competition to various markets the CCIA alleges are dominated by Microsoft, plus to prevent future harm to those and other markets.  The EC has been investigating Microsoft for alleged antitrust violations in Europe for some time regarding previous versions of its software.  According to the EC, the current investigation of Microsoft should be concluded early this year, i.e., any time soon.   Though the EC does not have the power to break up Microsoft, it does have the power to fine Microsoft up to ten percent of its worldwide sales if it rules against the company.

The 260-page filing of the CCIA accuses Microsoft of widespread violations of European competition law in connection with Microsoft’s Windows XP operating system.  The CCIA alleges that Microsoft’s latest version of Windows XP "takes Microsoft’s abusive practices to a new level, illegally protecting Microsoft’s existing monopolies and is illegally eliminating competition in new software and service markets."

The CCIA’s complaint has not been its only recent move against Microsoft.  Last December, it jointly moved with the Software and Information Industry Association to intervene in the United States v. Microsoft case, for the purpose of appealing the District Court’s judgment. On January 11, 2003 that motion was denied.  In its ruling, the D.C. Court found no evidence that the government failed to "vigorously and faithfully represent the public interest." United States v. Microsoft, 2003 U.S. Dist. LEXIS 1480 (D.D.C. 2003).

In the United States, Microsoft is now bound by the settlement reached, as modified by the D.C. Court.  For the next five to seven years, Microsoft will be forced to share certain technical information with actual and potential competitors, price its products fairly, and refrain from intimidating any disobedient customer, among other things.  In its approval of the settlement, D.C. District Judge Colleen Kollar-Kotelly imposed a condition that the settlement be modified to give the Court the power to issue orders sua sponte regarding the final judgment. [See our Newsletter "Sua Sponte" May Be Key To Recent Microsoft Ruling ]. It remains to be seen what action, if any, the EC will take as it considers Microsoft’s conduct in the marketplace. But, in the past the EC has demonstrated its predilection to steer an independent course from U.S. antitrust law enforcers, frequently to their consternation. The continuing inquiry into Microsoft’s practices illustrates once again the increasing internationalization of antitrust law. With different enforcement authorities applying different laws, the days of regulating enforcement just by electing a new President are at an end.

Submitted by: Edward M. Jordan, 310.312.4157