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MARCH 25, 2004
A New World for Microsoft? [Page 2 of 2] PAROLE OFFICER. those issues compound with Longhorn, the next major version of Windows, expected in 2006 or 2007. Microsoft has talked about including everything from Internet search to speech-recognition software. If rivals complain to the EU, it might try to prevent some of the planned bundling. That could force Microsoft to rethink its design plans for Longhorn, which could delay the product. Microsoft, however, says it has reviewed Longhorn bundling plans with its developers and lawyers and believes they're legal. Meanwhile, Microsoft's competitors can't wait to take advantage of Monti's ruling on sharing technical information. Right now, Microsoft's desktop and server software packages communicate with one another in a private language. "We have been excluded so far," says Matthew J. Szulik, CEO of Linux software distributor Red Hat (RHAT ). He hopes the ruling will give rivals what they need to smooth their interactions with Windows. To make all this work, Monti is creating another precedent: a monitoring trustee. Much as federal Judge Harold H. Greene oversaw the breakup of AT&T a quarter-century ago, Monti will appoint a trustee to handle oversight of Microsoft's compliance. The idea is to keep up the pressure on Microsoft so it can't sidestep the penalties by bogging the Commission down in bureaucratic and technical wrangling. MONOPOLY POWER. While there's a long way to go in this case, it's fundamentally different from what Microsoft faced in the U.S. because EU regulators have more authority than their U.S. counterparts. They get to make an initial determination of liability and propose a remedy without going to court. To forestall future anticompetitive behavior, they have the authority to quickly investigate and bring new charges against Microsoft if new complaints arise. In addition, because the ruling contains findings about Microsoft's market dominance and tactics that rivals can use to build future cases, "new cases will be much easier because the law has already been decided," says New York University School of Law antitrust professor Eleanor M. Fox. That could put an end to the cycle that unnerves foes who land in Microsoft's crosshairs: endless legal skirmishes that delay rulings until long after Microsoft has used its monopoly power to pummel them in the marketplace. It's still too early to say if the ruling will substantially alter Microsoft's conduct. Rivals were jubilant four years ago when U.S. District Judge Thomas Penfield Jackson ruled Microsoft a monopolist and ordered the company split in two. Microsoft managed to escape that fate, and it clearly expects to do the same here. But one thing's for certain: The Old World has imposed a new world order that could make Microsoft mighty uncomfortable.
 By Jay Greene in Seattle, Andy Reinhardt in Brussels, and Mike France in New York
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