New Case Against Microsoft Brought To European Commission

Dec 01, 2008

The Dutch software dealer HW Trading has proffered a complaint concerning Microsoft's marketing practices to the European Trade Commission. The reason: Microsoft has for years been selling its products at a higher price in Europe than it does in America.

A report on the Dutch news platform Webwereld says that lawyers of HW boss Samir Abdalla, have brought claims that Microsoft's price policy is in breach of Articles 81 and 82 of the European Community Treaty. According to the report, Microsoft had accused Abdalla of illegal license sales in California to the sum of 3.8 million dollars.

Abdalla is hitting back by bringing his case before the EU's Trade Commissioner, Neelie Kroes. Kroes is known for championing open trade standards and in the past, her department has not shied away from punishing Microsoft with million dollar fines.

The Dutch business man says he can provide enough documentation to support his claim. He compared Microsoft's US and European dealer price lists between 2004 and 2008 and found prices for identical products to be 30 to 50% higher in Europe. Coupled with Microsoft's 95% market share for its Office products, the price discrepancy represents an abuse of its market-leading position.

Because of the similarity of markets in the US and Europe, Microsoft cannot in this case claim special conditions, for example, cheaper labour costs, says the report, and currency fluctuation is not an issue because the European price lists are also in US Dollars. Also, Abdalla sees the anti-piracy rules, under which he faces charges in America, as an attempt by Microsoft to stem the legal parallel trade. Abdalla's arguments go further: Microsoft forbids the distribution of its operating system on CD or DVD, so that consumers who buy a new PC are unable to use the previous license. All this constitutes commercial abuse, says Abdalla.

If the EU Commission agrees with his arguments and finds European consumers and companies at a grave disadvantage remains to be seen, but any decision most likely will have no influence on Microsoft's case against HW Trading in the US.

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