Microsoft Verdict: Now all eyes turn to Europe

Microsoft hopes to use Friday's antitrust victory as a starting point for resolving legal troubles on this side of the Atlantic.

US District Judge Colleen Kollar-Kotelly on Friday approved a November 2001 settlement between Microsoft, the Justice Department and nine states and then she issued the revised settlement as her remedy in continued litigation brought by nine other states and the District of Columbia.

Her ruling, which University of Baltimore Law School professor Bob Lande described as "basically appeal-proof," is likely to bring the long-running antitrust case to an end. But that doesn't mean Microsoft's legal problems are over.

The European Union's Competition Commission is investigating allegations Microsoft used its dominance in desktop operating systems to gain an unfair advantage in the server software market. A preliminary ruling is expected by the end of year.

But Microsoft believes the US ruling could help resolve the investigation in Europe.

Brad Smith, Microsoft's general counsel, said: "The European case is the next closest to this one and the next closest to resolution. We do hope that the European Commission will consider [Friday's] decision as a reference point and we do hope they will weigh this information carefully with everything else they may consider."

Smith also indicated that Microsoft would be willing to resume talks that might bring a quicker resolution to the European antitrust case.

Smith was quick not to tie together too closely the two cases, which focused on very different issues. The US case largely examined whether Microsoft had used its dominance in desktop operating systems to thwart Netscape Communications, now owned by AOL Time Warner, in the browser market.

"We wouldn't want to suggest that just because the court on one side of the Atlantic does something, that decision makers on the other side of the Atlantic will necessarily follow suit," Smith said.

Still, the company sees certain aspects of Kollar-Kotelly's ruling - particularly one regarding the removal of so-called middleware code from the operating system - as important reading for European law makers.

"The most important part of [Friday's] decision for the case in Brussels is the court's discussion on code removal and its clear rejection of code removal as something that would be harmful to the industry, consumers and the economy," Smith said.

The European Commission expanded its case last year to include media playback software that Microsoft includes with both desktop and server versions of Windows. Microsoft bundles the software into the operating system.

The plaintiff states attempted to similarly expand the scope of the US case, but Kollar-Kotelly rejected the inclusion of so-called middleware technologies such as instant messaging and media playback in her remedy for Microsoft's antitrust violations.

During testimony at trial, Microsoft Chairman Bill Gates said removing so-called middleware code from Windows would break the operating system.

But Glenn Manishin, an antitrust attorney with US law firm Kelley Drye & Warren, questioned the impact Kollar-Kotelly's comments on code removal would have in Europe.

"I think the EU is going to make its own judgment," he concluded.

Joe Wilcox writes for News.com