Microsoft Urges EU to Reject Rivals’ Demands

Microsoft Corp. urged European regulators to reject demands by Sun Microsystems Inc., IBM Corp. and other competitors to force the giant software maker to license software codes.

In a 102-page response to European Commission allegations that it abused its market dominance, Microsoft said “compulsory licensing” of codes that underlie the Windows operating system would break international patent laws.

“In asking for more, and in making plain their eagerness to gain access to details of Microsoft’s innovations, the complainants are seeking to undermine the very competition laws the commission is charged with enforcing,” Microsoft said in the document, which was obtained by Bloomberg News.

Separately Monday, West Virginia’s attorney general filed a suit alleging Microsoft’s business tactics violated state antitrust and consumer protection laws.

The suit, filed by state Atty. Gen. Darrell McGraw on behalf of West Virginia consumers and state agencies, would position the state to opt its 1.8 million residents out of a class-action settlement with the company, according to a source. West Virginia is one of nine states that refused to join the Justice Department in settling a federal case against Microsoft.

In Europe, Microsoft is battling charges that it broke antitrust rules by trying to extend its dominant position in personal computer operating systems into the market for low-end server operating systems.

In the confidential memo, Microsoft also rebutted allegations it tried to obstruct the European investigation, saying the commission is ignoring a wider body of evidence it acted properly. The allegations center on letters sent on behalf of 34 customers in support of Microsoft, which the commission said may have been improperly obtained and incorrectly deemed commercially sensitive.

The Redmond, Wash., company said that although regulators may have shown that some companies that supplied letters said they didn’t know Microsoft would use them in the antitrust defense, at least 23 companies were aware of their purpose and several explicitly said so to the commission.

Microsoft’s competitors and customers have until Jan. 7 to file a response to Microsoft’s arguments.

The commission can order changes to Windows or levy fines as large as 10% of global sales if it finds evidence of anti-competitive behavior. Microsoft is trying to resolve the European case at the same time a federal judge in Washington reviews its proposed antitrust settlement with the U.S. government and several states.

Meanwhile, Microsoft attorneys also are pushing the $1-billion plan to buy school computers to resolve suits by U.S. consumers. The settlement, which has been called inadequate by two state attorneys general, may have prompted the West Virginia suit.

A Microsoft spokesman had no comment on the lawsuit.