European body expands probe of Microsoft

BRUSSELS: The European Commission said on Thursday it has expanded its
investigation of Microsoft Corp to look into whether the US software giant is
illegally tying its Media Player to its Windows operating system.

"This statement of objections supplements one sent to the company a year
ago and adds a new dimension to the Commission's concerns that Microsoft's
actions may harm innovation and restrict choice for consumers," the
European Union's competition watchdog said in a statement. Microsoft's Media
Player is software that permits the use of audio and video files without lengthy
download times on a personal computer.

The Commission said Microsoft might also be trying to extend its dominant
position in personal computer operating systems into inexpensive computer
servers usually used for printing, accessing the Internet, and storing files.
The Commission said Microsoft may have "withheld from vendors of
alternative server software, key inter-operability information that they need to
enable their product to talk with Microsoft's dominant PC and server software
products".

"Server networks lie at the heart of the future of the web and every
effort must be made to prevent their monopolization through illegal practices.
The Commission also wants to see undistorted competition in the market for media
players," EU Competition Commissioner Mario Monti said.

Commission spokeswoman Amelia Torres said Microsoft had two months to respond
to the charges and the company could also request a hearing, which she expected
to take place before the end of the year. She said the Commission was not
considering imposing any restrictions on Microsoft while its investigation was
under way. The Commission was not investigating Microsoft's new Windows XP
operating system as part of the probe, Torres said.

The European Commission announced in August 2000 it was investigating whether
Microsoft had used its dominance in personal computer operating systems to
damage its competitors in the server market - the computers that make network
computing possible. Microsoft has fought a long legal battle against antitrust
allegations in the United States.

In June, a US appeals court agreed with a lower court that Microsoft holds a
monopoly in personal computer operating systems with its Windows software and
that some of its business practices amounted to illegal preservation of that
monopoly. But the appeals judges cleared the company of trying to monopolize the
market for Internet browsers and said splitting the company in two was an
inappropriate remedy.

(C) Reuters Limited 2001.