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Microsoft attacks EU on bundling ruling

First blows landed in antitrust hearing

Microsoft kicked off its week-long appeal against the EC's (European Commission's) 2004 antitrust ruling today with a searing attack on the competition regulator's arguments against the bundling of Media Player in Windows.

The EC argued in 2004 that by including its own music and video streaming software, branded Media Player, in its ubiquitous OS (operating system), Microsoft would stifle competition in this important sector of the software market.

Microsoft's lead lawyer on the bundling issue of the appeal said evidence from the market showed that the EC's reasoning was flawed.

"PC makers already put more than one player on their PCs," said Jean-Francois Bellis, from the Belgian law firm Van Bael & Bellis. He added that RealPlayer from RealNetworks, which was one of the pioneers of streaming music and video content during the 1990s, "was widely distributed at the time of the Commission's decision".

The vast majority of website content providers design their music and video content to work using at least two media players, and 85 percent of users have adopted at least one non-Microsoft player, according to figures presented by Microsoft to the court.

There was no evidence at the time of the ruling in 2004 of the market "tipping" in favor of Microsoft, according to Bellis. "The EC decision must be rejected as it is disproved by events in the market," he said. "The absence of evidence of tipping is a striking repudiation of the EC's theory."

Since the 2004 ruling, Microsoft has launched XP edition N, as required by the European regulator. XP edition N has the media player stripped out but sells at the same price as the normal version of Windows XP.

To date, not one order for edition N has been placed by PC manufacturers, Bellis said, and only 1,787 have been ordered by computer stores across Europe in the nine months since it went on sale. This is equal to 0.005 percent of all XP sales in Europe during the same time period, he said.

The court appeal is being heard by 13 judges of the court of first instance, Europe's second-highest court, under the presidency of judge Bo Vesterdorf. The appeal will last all week and the final word of the court is expected between six months and a year from now.


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