The Hindu : No major adverse impact likely on Microsoft ruling

Online edition of India's National Newspaper
Friday, Mar 26, 2004

Business

Business

No major adverse impact likely on Microsoft ruling

By Batuk Gathani

BRUSSELSSAN FRANCISCO, MARCH 25.MARCH 25. The European Commission has stated that Microsoft had "virtually abused its monopoly power'' to keep other competing companies out of business in Europe. The more pessimistic but highly unlikely scenario is that the European Commission's `drastic and unprecedented' action against a major American company may trigger a fresh trans-Atlantic trade war. However, a more realistic perception of the European observers indicates that the immediate impact on Microsoft will be negligible and that the U.S. corporate giant may opt for a parley to retain its current near monopoly hold on the European markets.

The European Commission's action may prompt Microsoft rivals in the U.S. to trigger a fresh round of litigation against the software giant.

Many European observers also wonder whether the punishment would have much effect on financial stability and workings of Microsoft. Many eyebrows have been raised by the size of the fine (equivalent of Rs. 2,760 crores) but in reality the fine represents just one per cent of the Microsoft cash pile. Microsoft has more than $50,000 million in cash and short-term investments, hence, making the size of fine less important than what follows in terms of Microsoft's corporate behaviour. This could either be a beginning of a major legal war between the European Commission and Microsoft or the dispute could be amicably settled if Microsoft resolves to play the game and become more transparent and competitive. The company has been asked to disclose its secret codes otherwise it faces tough sanctions in the world's second largest market for software products after the U.S. Microsoft has 120 days to comply with and disclose requirements of the European Commission and it has 90 days to offer personal computer manufacturers a separate version of its window-operating programme that does not include Window Media Player, which is used to play audio and video.

Today the European Union is seen chartering an aggressive course in regulating behaviour of major global corporations. This is in direct contrast to the comparatively soft approach of the Bush administration in the U.S.

Microsoft enters

speech server market

BRUSSELSSAN FRANCISCO, MARCH 25.MARCH 25. Hours after his company was penalised by the European Union for abusing its dominant position, Microsoft Corp. Chairman, Bill Gates, launched a drive into a new market with a speech-enabled server that undercuts competitors' prices. Mr. Gates, speaking at a conference of software developers on Wednesday, did not mention the EU's ruling. Instead, he focused on upcoming technical products aimed at increasing the company's presence everywhere from businesses to mobile devices.

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