Unclear if Microsoft memo will be allowed evidence

BRUSSELS Mon Sep 10, 2007 10:30am EDT

Microsoft Corp. Chairman Bill Gates stands in front of the logo for the new Microsoft operating system Vista during his keynote address at the Consumer Electronics Show in Las Vegas January 4, 2006. Lawyers wonder if the European court deciding the Microsoft antitrust decision next Monday will rely on explicit internal Microsoft memos quoting Gates, first offered as evidence but later withdrawn. REUTERS/Rick Wilking

Microsoft Corp. Chairman Bill Gates stands in front of the logo for the new Microsoft operating system Vista during his keynote address at the Consumer Electronics Show in Las Vegas January 4, 2006. Lawyers wonder if the European court deciding the Microsoft antitrust decision next Monday will rely on explicit internal Microsoft memos quoting Gates, first offered as evidence but later withdrawn.

Credit: Reuters/Rick Wilking

BRUSSELS (Reuters) - Lawyers wonder if the European court deciding the Microsoft antitrust decision next Monday will rely on explicit internal Microsoft (MSFT.O) memos quoting Bill Gates, first offered as evidence but later withdrawn.

The 2004 European Commission decision found that Microsoft illegally bundled its own streaming media into the Windows operating system to damage rivals such as RealNetworks.

A special 13-member Grand Chamber of the European Union's Court of First Instance will rule whether the Commission was right.

RealNetworks (RNWK.O) offered as evidence internal Microsoft memos from 1997 to show Microsoft's intent.

A memo by Microsoft's Jim Durkin recalled a meeting by Gates and other executives in which Gates said of RealNetworks: "This is a strategic area, and we need to win it."

The same memo dated June 5, 1997, quotes another senior Microsoft executive, Robert Muglia, as saying that RealNetworks is "like Netscape, the only difference is we have a chance to start this battle earlier in the game".

Microsoft had its own legal troubles with Netscape. In 2001, a U.S. appeals court ruled Microsoft's successful tactics against Netscape constituted a serious violation of the basic U.S. antitrust law, the Sherman Act.

RealNetworks charged later in a private antitrust suit that Microsoft had also employed tactics against it that violated the Sherman Act.

In 2005, Microsoft settled the case and paid RealNetworks $761 million. RealNetworks, which had intervened in the European case on the side of the Commission, then dropped out.

RealNetworks withdrew its evidence -- which included memos, market data and more.

A coalition of anti-Microsoft lawyers appeared before the court on April 24, 2006, during a week of hearings on the case, and presented the Durkin memo along and some of the other withdrawn evidence.

"It is unclear whether the court is going to consider this part of the evidence because it was struck from the record," Maurits Dolmans, who formerly represented Real, told an antitrust conference in Fiesole, Italy, over the weekend.