EU hearing to open on Microsoft antitrust challenge

A special 13-judge court opens high-stakes hearings on Monday, deciding if it should curtail the European Commission's role as an antitrust watchdog or endorse forcing Microsoft to change its business practices.

The Commission found in 2004 that Microsoft had abused a virtual monopoly in its Windows operating system to muscle out rivals.

It imposed a record 497 million euro (344 million pounds) fine and ordered Microsoft to change the way it sells software.

Microsoft challenged that decision before the European Union's second-highest court, the Court of First Instance.

The court is holding the five-day hearing before its rarely used Grand Chamber of 13 judges in its largest courtroom, where all 215 seats are spoken for.

So many reporters are covering the hearing that most must watch it on television in an overflow room, with only 15 admitted to the court.

The first two days will be devoted to a review of the Commission's decision that Microsoft acted illegally by integrating audiovisual software into the Windows operating system, found on more than 90 percent of personal computers worldwide.

On Wednesday and Thursday the judges will hear Microsoft's challenge against the Commission's finding that Microsoft deliberately withheld information from rival makers of work group servers, so their software would not work as well as Microsoft's own.

Work group servers are used for printing, file-access and sign-on functions. Microsoft's share of the market has climbed steadily since it began competing illegally, the Commission said.

"The objective of this decision is to ensure that Microsoft's competitors can develop products that interoperate with the Windows (operating system) ... and viably compete," the Commission said about the interoperability function.

Microsoft says it acted legally, that others can compete fairly and the court should throw out the Commission decision.

"There is healthy competition and interoperability in all the markets covered in this case, and we will bring those facts to the court next week," the company said in a statement.

If Microsoft prevails, Brussels' authority for any future action against the company will be in tatters.

The Commission's power as Europe's premier competition regulator took a beating in three court reversals in smaller cases. Another defeat would inflict a huge blow on its prestige.

A decision in the case is not expected for months, possibly a year.

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