Thursday, December 13, 2007

Microsoft faces antitrust complaint for bundling browser

Less than two months after Microsoft lost a landmark antitrust case in Europe, a Norwegian software company filed a new complaint Thursday, challenging the U.S. software giant's bundling of its Web browser with the Windows operating system.

The complaint to the European Commission was filed by Opera Software, based in Oslo, a maker of browsers for personal computers and mobile devices. The company had $60 million in sales in 2006.

The company's chief technology officer, Hakon Lie, said that the bundling of the Internet Explorer browser into Windows, which has more than 80 percent of the market share in Europe, violated European antitrust law.

In September, the second-highest European court upheld a 2004 ruling by the European Commission that Microsoft had illegally tied its media player to Windows. That ruling required Microsoft to market a version of Windows without its media player program.

"Of course the European Court of First Instance decision strengthens our case and that is in part why we decided to file this complaint now," Lie said.

Opera was founded in 1995 and is one of the few companies, particularly from Europe, that has been able to eat into Microsoft's share of the browser market. Its Web software is known for packing a lot of features into a program that takes up little space; as a result it has made strong moves in the market for Internet browsers on cellphones.

In the complaint, Opera asked that the commission require Microsoft to unbundle Explorer from Windows, include rival browsers in the default Windows installation, or both.

Microsoft, which dropped its appeals of the commission's ruling following the court's decision, said its Windows operating system did not block the use of alternative Web browsers, and that consumers and computer makers were free to use any browser with Windows.

"We will of course cooperate with any inquiries into these issues, but we believe the inclusion of the browser into the operating system benefits consumers, and that consumers and PC manufacturers already are free to choose any browsers they wish," Microsoft said.

In the United States, Microsoft and the Department of Justice reached a settlement in 2001 that allowed Microsoft to continue to bundle Internet Explorer into Windows as long as computer makers and consumers could reset Windows' default settings to use other browsers.

Michael Reynolds, an antitrust lawyer with the firm Allen Overy in Brussels, said that Opera's legal case was likely strengthened by the court's rejection of Microsoft's appeal in September.

"What has changed is that we now have very clear guidance from the court as to what constitutes bundling and tying," Reynolds said. "I expect that the commission will conduct a thorough examination into this, based on the facts involved in this market."

A spokesman for the commission, Jonathan Todd, said that competition authorities would review the complaint. The commission's review of the initial antitrust case against Microsoft, which culminated in a record €497.2 million, or $736 million, fine in 2004, took almost six years.

Opera is a member of the European Committee for Interoperable Systems, a Brussels group that includes many of Microsoft's former legal opponents in the antitrust case, including Sun Microsystems, International Business Machines and Oracle.

The Norwegian company makes Web browsers for cellphone makers like Motorola, Nokia and HTC of Taiwan, as well as for the mobile network operators T-Mobile, a unit of Deutsche Telekom, and Vodafone.

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