Chris Parker: Microsoft

Microsoft is awaiting the verdict of its appeal against the European Commission’s record antitrust fine. Donna Sawyer talks to director of law and corporate affairs Chris Parker about the issues at stake

Microsoft’s main UK lawyer Chris Parker is anxiously waiting for a points decision after the software giant’s final bout before the European Court of First Instance last month.

With no knock-out blows delivered by either side during the week-long hearing, Parker, Microsoft’s UK director of law and corporate affairs, will have a tense few months before a decision is handed down.

However, Parker is quietly confident. “It was clear from the five-day hearing that the judges had a profound understanding of the case and what is at stake,” he says. “Our lawyers presented our key arguments, stressing the right of successful companies to develop their products and the role that IP plays in keeping the IT industry innovative. It’s impossible to predict the decision and we wouldn’t wish to engage in speculation… We await the judgement in due course.”

A panel of 13 judges is expected to deliver their findings on the case early next year.

The Luxembourg-based court heard Microsoft’s appeal against the European Commission’s landmark antitrust ruling more than two years ago.

In March 2004, the Commission imposed a record E497m (£340.8m) fine on Microsoft after it found the software company broke EU competition rules by abusing its dominant position in the market for computer operating systems and had undermined rival companies by linking digital entertainment software Media Player with Windows.

Microsoft’s US counsel Sullivan & Cromwell has advised throughout the case along with a number of other key advisers, including White & Case partner Ian Forrester QC, Brussels-based Van Bael & Bellis name partner Jean-Francois Bellis and Covington & Burling Brussels managing partner David Harfst.

Last month, Microsoft’s legal team had their last chance to argue its case, knowing all too well that the stakes were high.

If the Commission’s ruling is upheld, the court could impose further fines and force Microsoft to hand over valuable technical information about its Windows program to its competitors.

In court, Forrester QC accused the Commission of encroaching on Microsoft’s intellectual property and compared the regulator’s ruling to “opening the vaults of a bank” and handing out money to passers-by.

Needless to say, Parker is inclined to agree with Forrester. “A crucial part of this case rests on the rights of companies to invest in research and development, innovate, produce new products to meet customer demand and then retain the right to earn a return on that investment,” he says. “Mr Forrester was referring to the unprecedented nature of the compulsory license that the Commission has called for.”

Speaking to The Lawyer prior to the Luxembourg hearing, Parker insisted that the Commission had taken action that was of little benefit to the consumer.

He argues that the regulator was preoccupied with having a “head on a spike”.

“The whole thing has been too slow and too lacking in focus,” he says. “This is the eighth year of this case.”

Several international media reports described weaknesses on both sides of the argument. But, clearly, the burden of proof lies with Microsoft more so than the Commission.

For instance, while Microsoft admitted it could have separated Windows from Media Player on its release, the Commission struggled to show how the linking of the two software programs was a barrier to competition.

As part of its initial ruling the Commission ordered Microsoft to separate Windows from Media Player. But during the appeal hearing, Microsoft’s Bellis argued Media Player should not be a stand-alone product because it was an integral part of the operating system.

Parker says Microsoft sold minimal Media Players as single products when released on to the market.”At a big expense to the company we were required to produce a new product without Media Player and there were virtually no sales. Media Player can now be downloaded for free,” he says.

Microsoft is facing fines of up to E2m (£1.4m) per day if it is found to have delayed its compliance with the antitrust ruling of 2004.

The company’s external legal advisers have accused the Commission of continually moving the goalposts and Parker agrees. “We’ve tried to comply with the Commission’s demands and produce the information, but the Commission left us to our own devices,” says Parker. “We had very little contact at all with the Commission’s trustee.”

Parker, an English barrister, joined Microsoft in 2004 after leaving his position as senior counsel of Apple Europe. Prior to that, he was the legal and government affairs director at Compaq. Parker also spent more than 17 years at Digital Equipment.

Microsoft’s legal proceedings before the Commission and the Court of First Instance have consumed much of Parker’s time during the past two years and now he is looking forward to contributing to Microsoft’s future development.

“Microsoft’s activities in Europe – and across the world – go far beyond this or any other legal case,” he says. “We have the most exciting set of new product launches over the next year, including Windows Vista and Office System. These competition issues are just part of our overall relationship with the Commission.”

But Parker’s hopes of taking a break from competition issues may already be dashed, with the European Commission asking questions about Windows Vista.

There is no doubt Parker has one of the most high-profile in-house legal roles, particularly during the past year. Under intense pressure, he has managed to keep it together, but the real test is likely to come during the next 12 months. •