Sides set for Microsoft's European antitrust hearing

Microsoft Corp. is preparing for a three-day, face-to-face meeting with European competition regulators and some of its rivals beginning Wednesday, as the five-year-long antitrust case against the software giant nears a conclusion.

Microsoft said in a statement that it looks forward to the hearing, where it will face rivals including RealNetworks Inc., Sun Microsystems Inc. and its old trade association foe the Computer and Communications Industry Association (CCIA), as well as regulators from the 15 European Union member states and European Commission officials.

The company hinted that it still hopes to settle with the European Commission before the regulator issues its verdict early next year. "Microsoft remains committed to finding a constructive resolution to the case that addresses any concerns of the Commission while preserving the company's ability to innovate and to improve its products to meet consumer needs," it said.

But rivals, speaking on condition of anonymity, doubted that the software firm would offer anything that would meet the Commission's and their concerns.

"Will it make motions to settle? Yes. Will it really try to address the antitrust concerns? No. The chances of there being a meeting of minds is very low," said one rival who will be participating in the closed-door hearing.

Another rival, who will also be present, said the meeting will be "long and exhausting," and probably won't generate any new arguments from either side.

"The same old arguments will be rehashed. Microsoft will probably put on a splashy Hollywood-style show, but I doubt the hearing will change much in factual terms. It may have a psychological effect on the regulators, that's all," he said.

Microsoft will take the stand first at the hearing, followed by sympathetic voices from the industry.

Microsoft will use the first eight hours of the meeting to explain why it has not broken antitrust laws, according to a source familiar with the hearing agenda. Then regulators will cross-examine the firm's representatives, which will include Horatio Guttierez, Microsoft's senior counsel for Europe, the Middle East and Africa.

On Thursday afternoon the CCIA takes the stand, followed by RealNetworks and Sun. Microsoft returns to the stand on Friday afternoon to give its final reflections.

The Commission said in August that unless there is a settlement it will rule that Microsoft has abused the dominant position of its ubiquitous operating system software, Windows, in order to muscle out competitors in two separate software markets: audio and video playing software and computer server software designed for small networks of PCs.

The Commission said that by bundling Media Player into its Windows products, Microsoft put rival media players such as RealNetworks' RealOne Player and Apple Computer Inc.'s Quicktime at a disadvantage.

The Commission said it will either force Microsoft to unbundle Media Player, or it will force the firm to bundle one rival package in addition to Media Player.

By withholding crucial information about Windows code, the Commission said Microsoft has prevented rival makers of low-end server software from being able to interoperate with Windows.

In its August statement, the Commission said it would demand that the firm grant rival server software makers, such as Sun, access to the information that would allow their products to work as effectively with Windows as Microsoft's own server software.

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