Case upholds Europe's tough antitrust stance

WASHINGTON - A European Union appeals court's decision yesterday to uphold a 2004 antitrust order against Microsoft Corp. means that U.S.-based multinational corporations will continue to face tougher competition rules in Europe than at home, legal experts said.

Many U.S. companies had hoped that the EU's Court of First Instance would take steps to restrain the European Commission. The case is one of the first opportunities for the courts to interpret the EU's antitrust laws.

Instead, Microsoft lost its appeal, as the court agreed that the company had abused its monopoly in trying to muscle into server software.

"In global markets, the antitrust policy that matters is the most restrictive one," said M.J. Moltenbray, a partner at Freshfields Bruckhaus Deringer L.L.P., a London law firm.

The court decision yesterday confirmed that regulators had "quite broad power and quite broad discretion" over companies with large market shares, he said, citing Google Inc., Apple Inc. and International Business Machines Corp. as among those that needed to heed the decision.

But most companies do not have enough market muscle to require their customers to buy a broad sweep of their products, as Microsoft has.

"We can't even make people buy maintenance contracts on our machines," lamented Ronald Remick, chief financial officer of K-Tron International Inc., of Pitman, N.J.

"Our markets are very fragmented. We have a lot of competitors of different sizes," Remick said.

K-Tron makes machines that crush or weigh objects and tubes that feed material into other industrial machines. Its customers are global and its factories are in the United States, Switzerland, the United Kingdom and China.

The Microsoft decision will have no significant effect on how Vishay Intertechnology Inc. conducts its business, said Andrew Post, a spokesman for the Malvern, Pa., manufacturer of semiconductors.

"Vishay is on its own different playing field," he said. "Microsoft sells more to consumers. Vishay is more business-to-business."

Yesterday's court ruling could make Europe's antitrust regime more attractive to developing countries such as China and India, which are just beginning to implement competition laws, said Moltenbray, the London lawyer.

Carole Handler, a Los Angeles lawyer at Foley & Lardner L.L.P., said the ruling "just crystallizes the incredible difference between the antitrust philosophies of the EU and the United States."

A group of U.S. software companies, including Oracle Corp., Novell Inc. and Sun Microsystems Inc., applauded the ruling.

Sun, of Santa Clara, Calif., rather than a European company, brought the initial complaint in Europe against Microsoft.

"Microsoft's rivals . . . haven't been able to get the constraints they wanted out of U.S. courts, so they're trying to get them out of the European Union," said Keith Hylton, a professor at the Boston University law school.