Airbus bails out of EU-Microsoft scrap

Airbus has retired, hurt, after getting caught in the crossfire of the EU's battle with Microsoft, which goes to appeal next Thursday.

The plane-maker had filed with the European Court of First Instance appeal court with the aim of clearing up a number of technical legal issues on the definitions of markets. Under court rules, it had to file either for or against Microsoft and it chose to file for the software giant.

This became public last week while the EU was busy defending the aircraft maker against Boeing's charges of unfair competition under World Trade rules due to the subsidies it receives from the EU.

The Wall Street Journal today revealed that after a couple of days of indecision, Airbus has dropped its submission to the court. The report suggests that there may have been some pressure on the company to do so.

At one point last week there were suggestions that Boeing would file on Microsoft's side in the EU court, but nothing came of it. Both American companies have their headquarters in Seattle.

Other companies and groups have already filed on both sides of the appeals case. They include the Computer and Communications Industry Association, an American anti-Microsoft organisation.

Last week's American-EU talks to resolve the dispute over aircraft maker subsidies, enlivened by EU accusations that Boeing effectively receives subsidies from the US government, failed to reach an agreement. But this is a long-running battle which has been a regular feature of the EU's relations with the US since the formation of the Airbus consortium.

And today, Boeing was doing its best to dampen down the current trans-Atlantic dispute with CEO Harry Stonecipher in talks with French transport minister Gilles de Robien to head off a full-blown trade dispute.

Microsoft next week is starting what will be a very long appeal process against the European Commission decision to fine it a record €497m and force it to offer unbundled versions of Windows that do not have a browser, music player or video player.

Microsoft is appealing on the basis that this will discourage all manufacturers from adding new features. The initial hearings next week are to establish whether or not the EC ruling should be suspended during the appeal, which is expected to be a long, drawn-out process.

European competition law is designed only to ensure that competitors in various markets have a level playing field and to ensure that there is competition. It has no brief to protect consumers or to ensure that their interests are not damaged.