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MARCH 25, 2004
By Andy Reinhardt Microsoft: The Hot Ticket in Brussels [Page 2 of 2] THE CAMEL'S NOSE. So what, exactly, are the implications of the EC decision? One surprise is that the EC made no requirements concerning the pricing of future versions of Windows. Microsoft will be free to charge the same amount for the version without Media Player as it does for the full-featured version -- which means PC-makers will have scant reason for choosing the lesser version. But Monti's No.2, Philip Lowe, told reporters after the press conference that price isn't the issue. It's about providing market access to rivals that have been shut out, and affording consumers more choice. Between the lines, it isn't even about the Media Player. After all, most Net-connected PC owners already have more than one media player installed on their PCs. It's about putting a stake in the ground and finding something -- anything -- that regulators can use as an excuse to set a precedent for reining in Microsoft. The Media Player is just the camel's nose in the tent: The real objective in Brussels was to get a law onto the books that characterized Microsoft as an abusive monopolist. That will give the Commission and private plaintiffs a foundation for pursuing future cases about bundling new software features into Windows. "The principles crafted in this particular case are a framework for the future," explained Monti in an interview with BusinessWeek. TASTE OF DEFEAT. The requirement to disclose server interfaces is more troubling. Monti made a point of noting that it has actually gotten harder for non-Windows servers to communicate fully in Windows-dominated networks. Microsoft, he implied, had consciously developed proprietary specifications that exclude rival products -- with no discernible benefit to users. Yet any requirement to disclose intellectual property faces tough legal hurdles. In several past cases, the Court of First Instance and Europe's highest tribunal, the Court of Justice, have ruled in favor of companies protesting forced sharing of intellectual property. And even if the EC's order stands, international laws may make it difficult for U.S.-based companies such as Sun to use information disclosed to them in Europe in products sold elsewhere in the world. Still, given the amount of time spent working up this investigation and the painstaking efforts by Monti and his team to build a bulletproof case, Microsoft could be facing its Waterloo. LONG ROAD AHEAD. True, the EC's decision is no carte blanche for rivals to knock out every new feature Microsoft adds to Windows -- they'll still have to file cases and adjudicate them through the EU's administrative and legal systems. But the precedent established by the EC is a huge shot across the bow. Going forward, Microsoft will have to more careful when considering which features to add to Windows and how proprietary its internal specifications should be. As Monti concluded the press briefing, cameramen and reporters mobbed him on stage. Yet he showed no signs of smugness or satisfaction at all the attention. For the world's most notorious trustbuster, today was just the first step in a potentially decades-long process of determining how to apply antitrust law to the rapidly changing global technology industry. The reporters filing out of the briefing may have worn an air of professional nonchalance, but each of them knew they had witnessed an important moment of history.
 Reinhardt is covering the Microsoft-EU battle for BusinessWeek in Brussels
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