April 21, 2006

On the eve of the hearing: ECIS statement

ECIS is an Interested Party in the European Commission’s legal proceedings concerning Microsoft, and will give evidence supporting the Commission during next week’s Hearing before the European Court of First Instance pursuant to Microsoft’s appeal of the Commission Decision of March 2004.

The European Commission’s March 2004 Decision intends to put an end to a recurring pattern of illegal behaviour by which Microsoft exploits its monopoly position in the Windows PC client operating system to eliminate competition in related markets identified as having strategic interest. In so doing, Microsoft eliminates competition on the merits, stifles innovation and denies consumers any
real choice among competing products.

These anti-competitive practices violate fundamental and long-standing principles of European Union competition law. The Commission’s Decision focuses on two markets where this pattern of behaviour and its damaging effects are clear, work group server systems and media streaming players.

In both, Microsoft first welcomed innovative new technologies of others which complemented the Windows platform, then Microsoft assumed the functionality of these technologies and finally sought to eliminate this third-party competition once Microsoft’s own products on the relevant markets were deemed to reach a marketacceptable quality level. This was achieved by tying Microsoft’s products to its dominant Windows PC Client operating system and by reserving privileged interoperability to Microsoft’s own offerings.

Statement by Simon Awde
Chairman, ECIS

“We are confident that at the end of these judicial proceedings, the Court will uphold the Commission’s Decision. The applicable EU law is clear and the relevant jurisprudence well-established. The facts of the case are equally clear and all procedures have been respected. There is no basis for overturning the Commission’s Decision.

“On the eve of this five-day hearing, it is important to go back to basics. This case involves a clear abuse of market power by a super-dominant company using its monopoly power in one market – PC client operating systems - to foreclose competition on the merits in two others – media streaming applications and work group servers – as well as to eliminate potential threats to its existing monopoly power in PC client operating systems.

“The EU is not alone in these findings. In every jurisdiction where a verdict has been rendered, including the United States and the EU but also more recently Japan and South Korea, Microsoft has been found guilty of anti-competitive practices.

“Competition drives innovation, which in turn produces consumer choice. By foreclosing competition in these markets, Microsoft has directly harmed consumers.“Failure to uphold this Commission Decision will allow Microsoft to continue these anti-competitive practices in the markets addressed in the current case, and would open the way for an extension of the monopoly into new areas. Elimination of competition on the merits, further reduction in consumer choice, and Microsoft control of the fundamental technology platforms of the information society would be the unfortunate result.”

About ECIS

ECIS is an international non-profit association founded in 1989 that strives to promote market conditions in the ICT sector allowing vigorous competition on the merits and a diversity of consumer choice. ECIS has actively represented its members on many issues related to interoperability and competition before European, national and international bodies, including the EU institutions and WIPO, and is an official Intervener in the legal proceedings arising from the Commission’s March 2004 Microsoft Decision.

ECIS’ members include large and smaller information and communications technology hardware and software providers Corel, IBM, Linspire, Nokia, Opera, Oracle, RealNetworks, Red Hat, and Sun Microsystems.

ECIS media desk at Burson-Marsteller:
Tel: +32 2 743 66 10
Fax: +32 2 735 85 28
Email: info@e-c-i-s.org