Regulators investigating software giant again

European Union regulators said Monday they were again investigating software giant Microsoft Corp. this time on suspicion of abusing its market position by squeezing out competing Internet browsers and software rivals dependent on Microsoft programs.

The European Commission opened two formal probes, the first move against the company since a court four months ago backed the EU in a long-running legal battle over Microsoft’s actions in using its ubiquitous Windows operating system to elbow into new software markets.

Microsoft said it would cooperate fully with the Commission’s investigation and provide any and all information necessary.

“We are committed to ensuring that Microsoft is in full compliance with European law and our obligations as established by the European Court of First Instance in its September 2007 ruling,” it said in a statement.

EU spokesman Jonathan Todd said he could not put a time frame on how long it would take regulators to decide whether they would file formal charges against the company, saying this usually depended on “how complicated the issues are and the level of cooperation that we receive from the company under investigation.”

Although regulators did not specifically name Microsoft’s latest operating system, Vista, they will look at some of its features such as desktop search.

The EU is also wading into a row between Microsoft and open source developers backed by International Business Machines Corp. by looking into Microsoft’s open format for archived documents – Office Open XML.

The first new probe – triggered by a complaint from Norway’s Opera Software ASA – will look at whether Microsoft illegally gives away its Internet Explorer browser for free with Windows. Opera had called on the EU to strip Internet Explorer out of Windows or carry alternative browsers.

The investigation will check also if “new proprietary technologies” held other browsers back by not following open Internet standards. Regulators said they had also received allegations that Microsoft had illegally packaged desktop search and Windows Live to its operating system.

The second investigation will examine whether Microsoft withheld information from companies that wanted to make products compatible with its software – including Office word processing, spreadsheet and office management tools, some server products and Microsoft’s push into the Internet under the name of the .NET framework.

Since Microsoft supplies the software to the vast majority of home and office computers, rivals complain that refusal to give them interoperability information shuts the door on a huge potential market.

The EU said it was acting on a complaint from the European Committee for Interoperable Systems – a group representing IBM, Nokia Corp., Sun Microsystems Inc., RealNetworks Inc. and Oracle Corp. – that has asked regulators prevent Vista using Microsoft’s existing monopoly power to move into the new Internet market.

“It is regrettable that despite the judgment of September 2007, Microsoft continues to use its desktop monopolies to restrict competition. That’s what the ECIS and Opera complaints are about,” ECIS spokesman and legal counsel Thomas Vinje said.

The EU said it will also look at whether Office Open XML – used by governments and large corporations to store older documents – “is sufficiently interoperable with competitors’ products.”

Microsoft said it developed the format to offer richer software than the nonproprietary OpenDocument Format created by open source developers and used by IBM.

But the open source community claims that Microsoft is trying to supplant a possible rival in ODF and stem the potential threat of open source software eating into its market share.

The EU is building on its March 2004 decision that found Microsoft had violated EU antitrust rules by trying to damage rivals for server and media player software. It told Microsoft to offer a version of Windows without the Media Player software, to share communications code with rivals and pay a record $613 million fine.

Microsoft delayed obeying the order, launching an appeal to the European Court of Justice that it lost on Sept. 17, 2007.

Although Microsoft then dropped further appeals and promised to abide by September court ruling, the EU’s antitrust chief Neelie Kroes warned that a precedent had been set for future behavior in other areas.

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