PARIS Undetered by an ongoing investigation by European market regulators, Microsoft Corp. continues to preserve its operating-system monopoly, particularly by preventing governments from choosing the licensing-free Linux system over Windows, according to a report in Thursday's (May 15) International Herald Tribune.
Internal Microsoft e-mails obtained by the newspaper show that the software giant authorized its executives to draw from a special internal fund to offer the company's software at a steep discount or even free if necessary. Orlando Ayala, then a top sales executive at Microsoft, was quoted as saying, "Under NO circumstances lose against Linux" in an e-mail to Microsoft executives sent last summer.
Discounting is a common corporate sales tactics in most circumstances. But under European law, companies that hold a dominant market position, like Microsoft, are prohibited from offering discounts intended to block competitors from the market.
The report could get Microsoft in further trouble, particularly in Europe, as antitrust investigations targeting Microsoft are still active. One accuses Microsoft of refusing to supply essential information on its Windows operating system to competitors. Another alleges that Microsoft violated antitrust law by bundling its Media Player software into its operating system.
Industry sources here, however, do not expect the European Commission to announce decisions in the cases until late this year at the earliest.
Aggressive action by Microsoft to win back public-sector business for computer software and services comes at a time when the European Union has been promoting its "eEurope" initiative, with a goal to move all their public services online.
With the 2005 deadline drawing near, the European Commission has been calling for the broader use of open-source software by member governments. A groundswell of support for open-source software is building in Europe, with a number of government agencies recently approving a mandate favoring free software.
For instance, a Belgian agency, two regional governments in Spain and the southern German city of Schwaebish Hall have all publicly announced such plans.
Microsoft has denied any wrongdoing in the probe.