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[school-discuss] Looks on the surface that that Microsoft is still pushing hard against the limits if the open market system



Looks on the surface that that Microsoft is still pushing hard against the
limits if the open market system.

Bill Ries-Knight
Stockton, CA

Intelligence is the ability to discern.
Instinct is the ability to react.
Insight is Intelligence applied to Instinct.
**********************************************

http://www.infoworld.com/article/03/05/15/HNeuantitrustlaw_1.html

EU mulls report of Microsoft antitrust pricing
Microsoft tactics against Linux may violate EU law
By  Paul Meller May 15, 2003

 The European Commission is considering whether to order Microsoft to hand
over internal memos revealed in the International Herald Tribune and New
York Times newspapers that describe sales practices the European regulator
suspects may break its antitrust rules, people close to the Commission said
Thursday.

The sister newspapers reported that Microsoft's top salesman, Orlando Ayala,
last July circulated a confidential memo to senior executives of the company
around the world laying out a strategy to offer big discounts to governments
and institutions, and in some cases to offer the company's software for
free.
Ayala is reported to have told colleagues that the aim of the strategy is to
dissuade clients from switching to rival PC operating system providers --
and especially to Linux, the open source software platform which is starting
to steal market share from Microsoft in the server software market.
"Under NO circumstances lose to Linux," Ayala is reported to have written in
the memo dated July 16, 2002.
Most discounting is viewed as normal competitive business behavior, but
European Union antitrust law prohibits companies that dominate their markets
from offering big discounts if their main aim is to exclude rivals, or if
the discounts are only offered to certain clients.
Dominant firms can only justify discounts under E.U. rules if they can prove
that the discounts are designed to generate cost savings, rather than purely
being a way to beat off the competition.
The Commission, the executive body of the Union charged with enforcing
antitrust laws, has imposed heavy fines on several companies including
French tire maker Michelin, British Airways, and the food maker Irish Sugar,
for abusing their dominant positions with unfair discount or rebate schemes.
Commission spokeswoman Amelia Torres said the newspaper reports "make
interesting reading," but she declined to comment on whether the Commission
will follow up by sending Microsoft a so-called Article 11 letter, roughly
the equivalent to the subpoena handed down by U.S. courts.
"I can't prejudge what the Commission will or will not do" in response to
reports of questionable discounting by the world's dominant software firm,
she said.
The July 16 memo, together with subsequent internal e-mails the newspapers
claim to have seen, could provide grounds for a new antitrust lawsuit
against Microsoft in Europe, according to people close to the Commission and
to lawyers representing Microsoft rivals.
An existing European Commission antitrust lawsuit against Microsoft accuses
the company of leveraging its dominant position in operating systems
software for PCs to gain a similar dominance in the market for network
server software. It also accuses the firm of abusing its dominant position
by bundling in its Media Player software program in with its ubiquitous
Windows O/S software, thereby stifling competition in the market for video
and audio playing software.
Discounting isn't mentioned in the existing Microsoft case, nor is it
mentioned in a fresh complaint to the European Commission by Microsoft
rivals earlier this year concerning Windows XP, said Thomas Vinje, a lawyer
acting for some of Microsoft's main rivals.
He said that the allegations in the articles could overlap with part of the
Commission's existing lawsuit if it turned out that Microsoft was
discounting to win contracts in the workgroup server software market -- a
segment under special scrutiny in the European lawsuit.
But he added that the Commission is unlikely to want to delay a ruling in
the ongoing case, which is expected by the end of this year.
More likely, the European regulator would open a separate investigation,
Vinje said, but he added that sending an Article 11 letter "is a very
serious thing to do. I imagine they would take at least a couple of weeks
before deciding to do that."

Paul Meller is a Brussles, Belgium correspondent for the IDG News Service,
an InfoWorld affiliate.