EU probe is the next focus for Microsoft

The general manager of Microsoft Ireland, Mr Joe Macri, has said that the company would answer all questions in relation to the European Commission's investigation into whether Microsoft abused dominance of its Windows software.

"We look forward to continuing dialogue with the European Commission when they ask us some questions," said Mr Macri.

Competition Commissioner Mr Mario Monti is currently deliberating whether to impose his own set of sanctions against Microsoft for allegedly abusing dominance in its Windows operating system.

Microsoft is prepared to take a tough line with EU regulators following its resounding court victory after a five-year battle with US anti-trust authorities.

Senior executives at the US software group indicated it would not make substantial concessions to EU authorities beyond that required by last year's settlement with the US government over allegations that it had taken an unfair monopoly in the software market.

In particular, Microsoft is opposed to any request by the EU to separate Media Player, its video playing software, from Windows, its top-selling product. "Code removal [of Media Player] is not something we are prepared to consider," said Mr Brad Smith, Microsoft chief legal counsel.

It is expected Mr Monti will make a preliminary decision by the end of the year on whether to act against the firm, after studying the judgment issued on Friday by US Judge Kollar-Kotelly which endorsed an antitrust settlement between Microsoft and the US Department of Justice.

The European Commission says that Microsoft bundles its Media Player with its ubiquitous Windows operating system, putting rivals such as RealNetworks and Apple Computer Inc's QuickTime at a disadvantage.

The software plays music and shows videos, but it also serves as a platform to run other software. The Commission alleges software writers will prefer to design for the player included in Windows, making it hard for others to compete.

In a second charge, the Commission says Microsoft designed Windows to work best with its own server software, hurting competitors who use Linux or other versions of the Unix operating system. Judge Kollar-Kotelly, recognising this problem, changed the US settlement in her ruling to require Microsoft to disclose more technical information to rivals.

Meanwhile, in an interview yesterday, Mr Macri, described the decision made late on Friday by federal judge, Ms Colleen Kollar-Kotelly, as "fair and reasonable" and a good point for the software industry as a whole. But he warned the threat of continued legal challenges to the ruling remained. He said Microsoft would continue to ensure compliance with the terms of a settlement reached with the US Department of Justice last year.

Under the terms of this agreement Microsoft has simplified the terms of its licensing agreements with computer manufacturers. This enables them to remove certain Microsoft applications from a PC's operating system and replace them with competing products.

Mr Macri said the decision by Judge Colleen Kollar-Kotelly would not have any direct impact on Microsoft's Irish operations, which currently employ 1,800 staff in Dublin. However, he said it was fair to say that staff morale had gone through something of a roller-coaster ride over the past four years as a result of the lengthy antitrust case in the US.

As part of the agreement reached with the Department of Justice, hundreds of Microsoft staff in the Republic were being trained in matters of compliance to ensure they understood the settlement, said Mr Macri. He said 10,000 of Microsoft's 50,000 worldwide staff would undertake training.

Mr Macri said the agreement reached with the Department of Justice was pretty tough but fair. "We were keen to focus on the fact that it it did not hold us back from development. So we could continue to innovate and develop our operating system," he said.