Microsoft faces antitrust complaint from software trader

27.11.2008

Gerard van der Wal, an attorney with Houthoff, typifies the case as relatively easy. "Microsoft charges significantly higher prices for the same software in the eurozone than it does in the United States, even though the costs can hardly differ. We argue that Microsoft infringes on article 81 of the European Treaty, which outlaws cartels and agreements limiting competition, as well as article 82, which bans the abuse of a dominant position," Houthoff told , an IDG affiliate.

Houthoff pointed to the 95 percent market share of Microsoft Office, which Abdalla purchased in Egypt and then sold in the U.S. "This software is five times more expensive in Europe than in Egypt. But we didn't use Egypt as an example because Microsoft could argue that special circumstances, such as lower wages, would play a factor in pricing decisions. The comparison with the United States is much more appropriate."

Abdalla has produced an extensive list, comparing retail prices between the U.S. and E.U. between 2004 and 2008. "Prices would differ between 30 and 50 percent. This is a consequent policy, except for Windows Vista where prices differ only 15 percent. The reason for that is well known," he said in an apparent jab at Vista's poor image.

He added that fluctuations in exchange rates didn't play any part, because Microsoft prices its software in U.S. dollars in both regions. "Differences often added up to 40.6 percent. You see that percentage a lot. It appears that Microsoft uses standard factors in ?calculating a markup."

Abdalla also complains that Microsoft is using anti piracy regulations to stifle the legal trade in grey software. The company furthermore illegally blocks distributors from providing CD-ROMs and DVDs with new computers, preventing consumers from deploying the software on a different machine, which Abdalla argues amounts to abuse of power. "We have added several cases where Microsoft refused to sell its software to resellers. These are serious violations of article 81 of the European antitrust rules," Abdalla told Webwereld.