WRITTEN QUESTION E-3111/01

by Erik Meijer (GUE/NGL) to the Commission

(13 November 2001)

Subject: Accepting or resisting continuing efforts by the Microsoft IT corporation to use bundled software to secure an unassailable monopoly position

1. Is the Commission aware that court proceedings in the United States aimed at forcing the Microsoft IT corporation to split into two companies, the one marketing operating systems and the other applications software, are continuing, partly as a result of complaints lodged by a number of States against a legal judgment overturning that requirement as handed down in a previous ruling?

2. Does it support the above objective of breaking up a monopoly in the sector? What in that connection were the Commission's reasons for announcing on 16 October 2001 that it would not include Microsoft's new operating system, Windows XP, in its investigations into monopoly practices?

3. What scope does the Commission see for the future survival of companies marketing products with Microsoft-comparable features if they are unable to sell their separate stand-alone products because of the bundled-software approach operated by Microsoft?

4. For what reasons did competition Commissioner Mario Monti describe as premature and speculative reports in the Wall Street Journal and elsewhere of fines of up to 10 % of annual turnover or 2,5 billion dollars being imposed on Microsoft after a statement of objections had been leaked in which the company was accused of misleading and obstructing EU investigators by submitting 34 letters, apparently from customers, that were intended only to support and defend its business practices.

5. Does the Commission intend to impose a requirement for the EU market that particular functionality and applications associated with bundled desktop and server configurations and integration of consumer applications into such software be removed from the Windows operating system?

6. Does the combined use of Windows desktop and server configurations, which extends to extra functionality, such as management applications, amount to illegal practices aimed at dominating the market in low- to middle-range servers?

7. How does the Commission assess the fact that Microsoft withholds details of Windows APIs (application program interfaces) from suppliers of competing server operating systems, which led server producer Sun Microsystems to lodge a complaint with the Commission in 1999?

8. How does the Commission assess the fact that the built-in Windows Media Player provides a distribution channel for internet multimedia not available to Microsoft's competitors? Will it seek to end the new monopoly arising from this bundled-software operation?

Source: Computable 19 October 2001

Answer given by Mr Monti on behalf of the Commission

(14 January 2002)

1. Under the United States judgement referred to by the Honourable Member, the issue of an appropriate remedy was remanded to a lower court. The Commission is aware that nine States have decided to continue appropriate remedy proceedings in this court. However, the Commission stresses that although there are certain similar elements in the Union and United States cases, the two are factually and legally different.

2. Where infringements of the Community's competition rules are found, the Commission supports remedies which effectively bring such infringements to an end. The Commission has not received a complaint on Windows XP, and is therefore not conducting a formal investigation at this stage. It is however, monitoring all ongoing developments in the market.

3. Where additional products are built into a dominant platform, the Commission supports the principle that companies which sell stand-alone products with the same features should be provided the same access to that dominant platform.

4. At the time of the reports referred to by the Honourable Member, the Commission had not yet received Microsoft's reply to its supplementary Statement of Objections. The Commission therefore did not believe that it was appropriate to be discussing potential fines. As the Commission is now examining Microsoft's reply, and as a final decision has not been adopted, the Commission believes that it is still not appropriate to be discussing potential fines at this stage.

5. The Commission expressed concerns that such practices were illegal in its supplementary Statement of Objections. The Commission is currently examining Microsoft's reply to this Statement of Objections, and will on the basis of this and submissions from third parties assess whether these objections are confirmed. Until this assessment is made, the Commission does not believe that it is appropriate to discuss potential remedies.

6. The Commission expressed concerns that such practices were illegal in its supplementary Statement of Objections. The Commission is currently examining Microsoft's reply to this Statement of Objections, and will on the basis of this and submissions from third parties assess whether these objections are confirmed.

7. As a result of an exhaustive analysis of the market and Sun's complaint, the Commission issued a Statement of Objections in August 2000, in which concerns were raised that Microsoft was withholding Windows APIs from suppliers of competing server operating systems. More concerns of this nature were raised in the Commission's supplementary Statement of Objections which was issued in August 2001. The Commission is currently examining Microsoft's response to these objections, and will on the basis of this, as well as submissions from Sun and other third parties assess whether the objections are confirmed.

8. In the Commission's supplementary Statement of Objections, concerns were raised that the bundling of Media Player into Windows could adversely affect the ability of companies with stand-alone media player products to compete with Microsoft on a level playing field. The Commission is currently examining Microsoft's response to these objections, and will on the basis of this and submissions from third parties assess whether these objections are confirmed.