Court questions EU ruling against Microsoft

Judges hearing Microsoft’s appeal against a 2004 EU competition ruling have questioned whether forcing the company to reveal its programming code was necessary.

Microsoft believes that the information – which the European commission says should be given to rivals to allow their servers to work more smoothly with Windows – is commercially sensitive.

On the fourth day of the week-long hearing in Luxembourg, Judge John Cooke, one of the 13-strong panel hearing the case, seemed to be sympathetic to Microsoft’s case.

“The information, which forms interoperability, is hugely valuable commercial information,” he told the commission’s lawyers.

“That’s why it's difficult to understand the attitude of the commission that these are mere trade secrets,” the judge said.

But the commission said that the estimation of the value of the code came entirely from Microsoft, and was based solely on the amount of effort it had taken to create rather than any inherent value.

Lawyers representing Microsoft’s rivals, including Sun Microsystems and IBM, said the “information is not kept secret because it is valuable. It is valuable because it is kept secret”.

But Cooke questioned whether competition rules meant that Microsoft should be obliged to give away the information, and the commercial advantage it entails.

Microsoft’s lawyers say achieving complete interoperability, as the commission wants, would require them to give up much more than simply the operating protocols.

The trustee overseeing Microsoft’s compliance with the commission’s ruling has already stated that the information provided so far by the corporation is next to useless.

The hearing will end on Friday with Microsoft’s attempt to overturn the record €497m fine imposed by commission.

The court, whose final decision is not expected until the end of the year at the earliest, has already heard arguments about the unbundling of media player software, another requirement of the commission’s ruling.

Microsoft claims that consumers benefit from additional software, and that the success of rival players, such as Quicktime or Real, showed that competition had not been stifled, as the commission contends.

A court decision in favour of the commission would force Microsoft to radically change the way it does business, and potentially make it far easier for competitors to produce hardware that is compatible with Windows.

It could also have serious implications for the company’s new Vista suite, which competition commissioner Neelie Kroes has hinted may also not be in compliance with the EU ruling.

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