(Washington, D.C.) – Citizens Against Government Waste (CAGW) today denounced the European Commission (EC) for continuing its offensive against Microsoft despite the company reaching a settlement with its last big competitor in the EC’s antitrust case.  RealNetworks announced a $761 million legal settlement with Microsoft that ends all their antitrust disputes worldwide.

“The EC’s case against Microsoft was always based on competitors’ complaints, not consumers’ complaints.  This settlement removes the last vestige of legal or factual basis for the EC’s persecution of Microsoft,” CAGW President Tom Schatz said. 

The agreement includes a $460 million cash payment to RealNetworks and greater access to some Windows Media technologies.  In March 2004, the EC issued a decision requiring Microsoft to hand over valuable intellectual property to its competitors, unbundle its software, and pay a $613 million fine.  Although the European Court of First Instance recognized that the merits of the case favored Microsoft, the company was still forced to comply with the EC’s order by creating two versions of the Windows operating systems, one with its music and video player program, Media Player, and one without.  Microsoft also released server system code to competitors.  In March 2005, the EC expressed “strong doubts” that Microsoft is adequately complying with its orders.  The Court of First Instance has not yet set a date to hear Microsoft's appeal.

“The EC’s course of action runs contrary to legal precedent and stands against the U.S. Constitution’s protection of intellectual property,” Schatz continued.  “In the U.S., the courts reached a fair agreement with Microsoft that did not set overbearing restrictions on future technology.  The EC’s actions will have global ramifications for the economy and for taxpayers.”

Competitors hoping to gain from the prosecution of Microsoft have complained that the unbundled version has technical problems that make it less functional when used with other players.  But Microsoft predicted that stripping Media Player files from its operating system to conform with EC directives would cause problems for rival players.  

“Governments have no business trying to design software,” Schatz concluded.  “With the RealNetworks settlement, there is even less reason for the EC to continue skewering the marketplace with burdensome regulations and hurting taxpayers with costly litigation.” 

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.