Fast Company

Microsoft and Intel Fight E.U. Lawsuits Just as Antitrust Policies in the U.S. Get Tougher

The European Union's taking a strict line on anti-competitive behavior by two giants of the computing industry: Intel and Microsoft. This week, Microsoft is wriggling to try and fend off an E.U. ruling against it, while the chip maker is due to be found guilty. This comes just officials in the Obama administration reveal plans for more aggressive antitrust enforcement, restoring policies that led to the landmark lawsuits against Microsoft and Intel in the 1990s.

Back in January a European Union court found Microsoft guilty of anti-competitive behavior through packaging Internet Explorer as the default browser in Windows--the E.U. found this was effectively a barrier to consumers using other competing net browsers, like Google Chrome or Firefox. The company has had several months to formulate a response, and has just come up with a set of arguments with which it hopes to deflect the E.U.'s punishment. And the main thrust of the defense is that any action that would require the consumer's attention to be drawn to which browser to choose would give Google a dangerous advantage. Dangerous because Google itself could collaborate with PC manufacturers to ensure its browser got a dominant role and that default search engines in the browsers would be pointed to Google.com.

That smacks of desperation if you think about it, claiming in your antitrust defense that someone else may act anti-competitively thanks to the ruling against you. But Microsoft is arguing its share of the browser market has already fallen to just 55% nowadays, and hence its activities have not impeded the browser market.

The E.U. is due to hold a hearing in June to give Microsoft one last chance to defend itself before it acts to force the company to bundle other browsers with its Windows packages.

Meanwhile there's a strong rumor the E.U. is due to rule against Intel this week in a separate antitrust case. In this instance, Intel is due to be found guilty of paying or otherwise incentivizing PC manufacturers to delay or scrap their plans to make computers that carried CPUs made by Intel's rival AMD--a flagrant abuse of its position as market leader. It looks like the E.U. courts believe Intel was setting quotas for some companies as to how many of their machines could carry the rival chips--20% for NEC machines, and 5% for HP computers.

The likely punishment is a hefty fine, and since the practices have been on-going for over eight years, it's likely to be a large sum indeed--speculation is centering on whether the fine will even beat the biggest by the E.U. yet: the $655 million handed out to Microsoft in 2004 for another anti-competitive case.

[via Reuters, FT.com]

Related: Why the EU Shouldn't Force Microsoft to Install Other Browsers
Related: Google, Apple May Suffer Anti-Trust Action for Sharing Board Members
Related: European Union Accuses Microsoft of More Anti-Competitive Action

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