Microsoft, EU Debate Access for Rivals

General counsel for Microsoft Corp. Brad Smith arrives at the Court of First Instance in Luxembourg, Tuesday April 25, 2006. The EU's second-highest court began questioning Microsoft Corp. and the European Commission Tuesday, as the software maker embarked on the second day of its quest to overturn a landmark antitrust ruling against it. (AP Photo/Geert Vanden Wijngaert) (Geert Vanden Wijngaert - AP)

LUXEMBOURG -- Microsoft Corp. complained Wednesday that the European Commission forced it to hand over trade secrets to rivals, effectively giving them a "free ride" on the work the software maker did to acquire new customers and develop new technologies.

But Anthony Whelan, the Commission's lawyer, said that the "super-dominant" software maker had managed to strangle its rivals' innovation and was unlikely to face "an attack of the clones" if it gave companies the information they needed to make their programs work more smoothly with the Windows operating system.

"Microsoft's alarmist claims about duplication have been made for your consideration only," he told the panel of 13 judges who are considering the company's challenge to the Commission's 2004 antitrust order and record 497 million euro ($613 million) fine.

The weeklong hearing was in its third day Wednesday, and the focus shifted from media player software to the EU regulators' order that Microsoft give interoperability information to makers of rival server operating systems.

Whelan said Novell Inc. and Sun Microsystems Inc. were reduced to catering to network servers with "last century's technology" _ Windows NT _ because Microsoft withheld the code needed to allow them to work smoothly with PCs running the world's most-used desktop software.

"In network computing, the client is king and the client speaks Windows," he said.

Microsoft's refusal to supply server protocols from 1998 onward meant most servers had to use more time-consuming and costly techniques to supply software people wanted, keeping them a generation behind Microsoft's software, he said.

The company broke with standard practice in the technology industry by refusing to supply interoperability information, he said.

Microsoft insisted that the survival of its rivals and the emergence of new companies proved the competition was strong. The Commission argued the degree of interoperability Microsoft allowed was simply not viable for most customers and "effective competition" no longer existed.

Microsoft lawyer Ian Forrester said the Commission's order has been an attempt "to handicap the (market) leader in perpetuity" by forcing it to hand over trade secrets.

He said Microsoft's server software was compatible with products made by other companies, such as those from Novell and Sun and using Linux and UNIX-based servers.

"Microsoft spends an enormous amount of effort attempting to achieve interoperability," said Microsoft executive John Shewchuk.