Microsoft cancels antitrust hearing in Europe

Software giant claims the timing of the meeting works against it, while rivals argue it is running scared

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In January the Commission accused Microsoft of distorting fair competition in the market for Internet browsers by tying IE to Windows which, it argued, gives IE an advantage over rival browsers.

The case is similar to one focussed on IE in the U.S. launched under the final Clinton administration, which was then dropped under the first administration of George W. Bush in favor of a broader antitrust suit in which Microsoft was charged, and later found guilty of, illegally thwarting competition in order to extend its operating system monopoly

It also echoes a previous legal challenge to Microsoft in Europe in 2004, when the Commission ruled that tying Media Player, software that plays video and music tracks, into Windows was illegal for the same reason bundling IE is.

It ordered Microsoft to launch a second version of Windows that had the media player stripped out. However, this remedy is widely seen as being useless, largely because it didn't insist on the unbundled version of the OS being sold at a lower price than the one equipped with Media Player.

This time the Commission is considering forcing Microsoft to include rival browsers inside Windows. The idea would be to give users a genuine choice between browsers.

This so-called "must carry" remedy is broadly supported by the rival browser makers. However, some are worried about the precise wording, arguing that if the Commission isn't careful, its remedy could replace Microsoft's near monopoly with an equally harmful Microsoft/Google duopoly.

Microsoft itself has made similar arguments, warning that the 'must carry' remedy would allow Google to pay manufacturers for presence inside PCs, instead of paying Opera and Firefox for default search engine status on their browsers.

"The proposed remedy could enhance Google's dominance in the lucrative market for Internet search, and force other browsers that currently depend on revenues from Google out of business," said one person close to Microsoft who asked not to be named.