October 11, 2005
ECIS comments on the Real's settlement with Microsoft

ECIS has noted the settlement between RealNetworks and Microsoft. This settlement must not result in the closure of the EU case. The Commission must, and we expect it will, proceed vigorously with its case against MSFT.

Precedent-setting cases such as the EU investigation take time. Since 1999 the market has moved on, and Microsoft has been able to continue its tying for more than a year after the 2004 Decision. It is therefore understandable that RealNetworks might have decided to settle and use the opportunity to invest in its subscriber and games business.

The role of the antitrust authorities in the EU, US, Korea, and elsewhere, on the other hand, is to protect the structure of competition in the interest of consumers.

Microsoft has not given up its exclusionary policies. If the rumour is correct, it shows the importance of ensuring that effective remedies are implemented on an expedited basis, to ensure that customers continue to benefit from effective competition. Indeed any settlement in fact validates the Commission's case.

Since the Commission is not bound by any private settlement, ECIS therefore urges the Commission to vigorously defend its 2004 Decision. Confirmation of the precedent will allow it and the courts, as the issue will arise again, to take a decision in time to protect effective competition when it is threatened by Microsoft's continuing unlawful bundling strategies.

This is yet another example of MSFT paying substantial sums to firms to settle specific lawsuits while the courts are still reviewing the matter without fundamentally changing its market behaviour which has been deemed to be anti-competitive by competition authorities in numerous jurisdictions. Pursuing the EU and Korean case is therefore more important than ever.

Thomas Vinje
Partner, Clifford Chance
Legal Counsel to ECIS