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EU Says 2 Withdrawals Won’t Hurt Antitrust Case

November 25, 2004

BRUSSELS, Belgium — The European Union insisted Wednesday its antitrust case against Microsoft Corp. remains intact despite a surprise meeting called by the judge following the desertion of two of the EU’s biggest allies.

“Just the fact that certain parties have withdrawn from the proceedings doesn’t change the facts of the case at all,” said EU antitrust spokesman Jonathan Todd. “Hence the proceedings will follow their normal course at the court.”

He declined to comment on the significance or reasons for today’s closed-door session with Judge Bo Vesterdorf, whose decision whether to suspend the EU’s far-reaching order against Microsoft, pending appeal, is expected within weeks.

Vesterdorf invited all parties to the European Court of First Instance in Luxembourg to discuss “procedural matters,” the court said Tuesday.

People familiar with the matter, speaking on condition of anonymity, said the judge wanted to clarify the “nature and meaning” of the Nov. 8 defection from the EU side of Microsoft rival Novell Inc., which has operations in Utah, and a Washington-based trade group, the Computer and Communications Industry Association.

Although neither will be actively involved in the litigation anymore, industry sources said the evidence and other support they provided to European regulators over the years should remain valid.

CCIA president Ed Black denied Wednesday that his group’s submissions had been withdrawn, noting that he specifically stressed in announcing the settlement that CCIA was not “retracting or changing positions taken in the past.”

A Novell spokesman in London, Peter Joseph, had no immediate comment. But Novell’s general counsel, Joseph LaSala Jr., described Novell’s involvement in the EU case as “useful” at the time it withdrew, adding: “There is simply not much left for us to do.”

Microsoft Corp. paid Novell $536 million and an undisclosed smaller amount to the CCIA to pull out of the EU case.

Both supported the European Commission in its investigation, which ended in March with a decision ordering changes in Microsoft’s business practices as well as a fine of 497 million euros ($646 million).

Microsoft has settled with four of the five major intervenors in the EU’s case, having previously spent $2.4 billion settling claims by Time Warner Inc. and Sun Microsystems Inc.

The last big opponent, RealNetworks Inc., maker of a rival to Microsoft’s digital Media Player application, denied Tuesday that it and the EU were becoming isolated.

David Stewart, a senior lawyer with RealNetworks, told Dow Jones Newswires that it and other companies “remain resolved to support the decision and protect consumers.”

In announcing its settlement, Novell said the agreement resolved its claims involving the Netware operating system for connecting computers across networks, which competes with Microsoft’s dominant Windows software.

Novell said then it would go ahead with an antitrust lawsuit in the United States against Microsoft over damage a decade ago to its once-popular WordPerfect business software.

The CCIA, which has fought Microsoft vigorously on legal fronts for more than a decade, did not disclose the size of its payment, but said Microsoft would spend $65,000 to become a member.

Citing confidential documents it had seen, the Financial Times reported on its Web site late Tuesday that the CCIA had received $19.75 million from Microsoft, with Black personally getting $9.75 million. Black and Microsoft declined to comment on details of the settlement, but the company said it had no “visibility” on where the money would go, according to the newspaper.

Black refused to comment on the figures in the report.




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