The Commission's action follows a complaint by rival software
company Sun Microsystems that Microsoft breached European Union
antitrust rules by engaging in discriminatory licensing and by
refusing to supply essential information on its Windows operating
systems.
The technology explained
The Commission observed that Microsoft has a market share of
about 95% in the market for PC operating systems and thus enjoys a
practically undisputed market dominance. Most PCs today are
embedded into networks, which are controlled by servers.
Interoperability, i.e. the ability of the PC to talk to the server
is the basis for network computing. Interoperability can only
function if the operating systems running on the PC and on the
server can talk to each other through links or so-called
interfaces.
To enable competitors of Microsoft to develop server operating
systems which can talk to the dominant Windows software for PCs,
interface information - technical information and even limited
parts of the software source code of the Windows PC OS - must be
known.
The problem
Without interoperating software and as a result of the
overwhelming Microsoft dominance in the computer software market,
computers running on Windows operating systems would be, in effect,
obliged to use Windows server software if they wanted to achieve
full interoperability. This phenomenon is referred to as "the
client (PC) dragging the server".
The Sun allegations
Sun Microsystems alleged, in a complaint in December 1998 and in
subsequent submissions, that the near monopolistic position of
Microsoft in the PC operating system market creates an obligation
on Microsoft to disclose its interfaces to enable interoperability
with non-Microsoft server software.
This obligation would cover the OSs distributed by Microsoft at
the time when Sun's request for disclosure of interface information
was refused in October 1998, i.e. Windows 95, 98, NT 4.0 and all
subsequent updates.
Sun alleges that the launch of Windows 2000 on 17 February 2000,
was a final step in Microsoft's strategy to strengthen the effects
of its refusal to supply interface information with the intention
of driving all serious competitors out of the server software
market. Sun claims that Microsoft has applied a policy of
discriminatory licensing by distinguishing between its competitors
according to a so-called "friend-enemy" scheme.
The Commission was given evidence that Microsoft did not carry
out its obligation to disclose sufficient interface information
about its PC operating system.
The view of the Commission
The Commission believes that Microsoft gave information only on
a partial and discriminatory basis to some of its competitors. It
refused to supply interface information to competitors like Sun
Microsystems.
The Commission has said that resolution of this case is of the
utmost importance as operating systems for servers constitute a
strategic sector in the development of a global market for
information technology and e-commerce.
Commissioner in charge of competition, Mario Monti, said in a
statement issued today:
"The Commission welcomes all genuine
innovation and advances in computer technology wherever they come
from - as highly positive developments for consumers and industry
alike. Effective protection of copyrights and patents is most
important for technological progress. However, we will not tolerate
the extension of existing dominance into adjacent markets through
the leveraging of market power by anti-competitive means and under
the pretext of copyright protection. All companies that want to do
business in the European Union must play by its antitrust rules and
I'm determined to act for their rigorous enforcement."
