EU May Hit Microsoft With New Antitrust Inquiry

Microsoft Office could be the next focus of the European Union's antitrust agency after a group of Microsoft rivals -- IBM, Oracle and Sun Microsystems -- complain again to the

March 9, 2006

2 Min Read
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The European Union's antitrust agency may open an entirely new investigation into Microsoft Corp., the group's chief told reporters in Japan, this time on allegations that Microsoft Office has an unfair monopoly.

Last month, a group representing Microsoft rivals IBM Corp., Oracle Corp., and Sun Microsystems, Inc. filed a complaint with the EU's Competition Commission; among its claims was that Microsoft didn't allow other vendors to create Office-like products that interoperated with the Redmond, Wash.-based developer's Windows operating system.

Tuesday, EU Competition Commissioner Neelie Kroes told reporters in Tokyo "We have a duty and responsibility, if there is a complainer, to take it seriously. If the complaint makes sense, we will [investigate]."

Microsoft already faces a 2 million euro ($2.4 million) per day fine for what the EU charges is non-compliance with its 2004 antitrust ruling. Most recently, Microsoft counter-charged that the EU was in cahoots with its competitors, and wasn't getting a fair shake. A hearing is planned for later this month where Microsoft will present its rebuttal to the out-of-compliance allegations.

Microsoft Office, which has a virtual lock on the business application market, is one of the company's cash cows. In its most recent earnings statement, Microsoft noted that the Information Worker group, whose main product is Office, accounted for $2.1 billion in profits in the quarter, about 45 percent of all profits. (Windows accounted for nearly all the rest.)The fact is, said Matt Rosoff, an analyst with Kirkland, Wash.-based Directions on Microsoft, antitrust litigation has become the norm for Microsoft. "Antitrust is simply a condition of doing business for Microsoft," he said.

"Even if they don't violate the letter of the law, if competitors think that it's doing something similar to what's been decided earlier, it could lead to another lawsuit," Rosoff added.

"Microsoft accounts for antitrust litigation in its planning. That's the way it's going to be as long as it has a dominant position in markets like operating systems and suites," said Rosoff.

"Lawyers [there] are going to be busy."

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