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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (48318)	8/3/2000 10:05:35 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 74651

As if MSFT wasn't facing enough threats from our government: EU turns up heat on Microsoft with new threat (UPDATE: Recasts, adds details, quotes, background throughout) By Michael Mann BRUSSELS, Aug 3 (Reuters) - The European Commission, compounding Microsoft Corp's (NasdaqNM:MSFT - news) legal problems, warned the U.S. software giant on Thursday it believes it is abusing its power to gain an edge in the global market for server software. It said it had sent Microsoft a so-called statement of objections ``for allegedly abusing its dominant position in the market for personal computer operating systems software by leveraging this power into the market for server software''. Servers are powerful computers used to manage networks of other machines. The move is the latest legal headache for Microsoft, which a U.S. judge in a major antitrust case earlier this year ordered to split itself in two. The latest threat mirrors a similar investigation launched by the Commission in February into whether Microsoft had designed parts of its new Windows 2000 package to allow it to extend its dominance in personal computer operating systems to server operating systems and ultimately electronic commerce. Microsoft has two months to reply to the allegations and may request a hearing to put over its arguments. If it does not satisfy the Commission's concerns, it could be fined up to 10 percent of its worldwide revenues, although such a large fine has never in practice been imposed. COMPLAINT FROM SUN The Commission action came after U.S. software company Sun Microsystems (NasdaqNM:SUNW - news) alleged that Microsoft had breached EU antitrust rules by discriminatory licensing and by refusing to supply essential information on its Windows operating system. Sun chairman Scott McNealy has been a major proponent of breaking up Microsoft. ``Sun alleges that the launch of Windows 2000 on February 17, 2000 was a final step in Microsoft's strategy to strengthen the effects of its refusal to supply interface information with the intention of driving all serious competitors out of the server software market,'' the Commission said in a statement. ``The Commission believes that Microsoft gave information only on a partial and discriminatory basis to some of its competitors,'' it added. Microsoft said it had no immediate comment to make. MICROSOFT DOMINATES PC SOFTWARE The Commission said Microsoft had about 95 percent of the market for personal computer operating systems. It said PCs using Microsoft software could only communicate with server systems if Microsoft made available certain technical information to competitors producing those servers. Without such information, computers running on Windows operating systems would have to use Windows server software too. ``We will not tolerate the extension of existing dominance into adjacent markets through the leveraging of market power by anti-competitive means and under the pretext of copyright protection,'' EU Competition Commissioner Mario Monti said in a statement. A Commission spokeswoman said the substance of the latest case was the same as the investigation launched into Windows 2000 at the Commission's own initiative in February. But she said it was based on an older complaint dating back to December 1998 and referred to earlier software packages such as Windows 95, Windows 98 and NT 4.0, as well as Windows 2000. ``GOOD EVIDENCE OF MISCONDUCT'' The spokeswoman said the Commission ``cannot exclude that the two cases may be combined in the future'', adding the sending of a statement of objections indicated the Commission had ``good evidence of misconduct''. Microsoft faces other probes in Europe. The Commission recently reopened an inquiry into its pricing policy in France, following a complaint by Micro Leader Business and has said it is looking into other complaints against the company. Last month, it forced Microsoft to change the terms of its purchase of a stake in British cable company Telewest (quote from Yahoo! UK & Ireland: TWT.L). In 1998, the Commission forced Microsoft to alter contracts with Internet service providers and in 1997 it backed rival U.S. company Santa Cruz Operation Inc (NasdaqNM:SCOC - news) which had complained Microsoft was hindering its operations. The Commission stressed its inquiry was different from the proceedings faced by Microsoft in the United States, which concern allegations Microsoft protected its dominance in PC operating systems through measures aimed at weakening competitors' Internet browser systems.