Microsoft's European Odyssey: A High-Stakes Showdown over Antitrust

The city of Cambridge, known for its prestigious university, has undergone a remarkable transformation in the last decade, with the arrival of tech giants like Microsoft and a plethora of start-ups vying to follow in its footsteps. As the company faces an intense showdown over antitrust issues, its European operation is watching with bated breath. "For us, Microsoft is viewed as the archetypical high-tech success story," says John Cornish, director of product marketing for ARM Holdings, a designer of microchips for hand-held devices based in Cambridge.

As the European Commission, the executive unit of the European Union, investigates Microsoft's practices, the stakes are high. The Brussels-based commission is examining Microsoft's integration of certain server-related software technology into Windows 2000 and its agreement to acquire 29.7 percent of Telewest, the British cable TV operator. "This is not a competition between antitrust authorities," a spokeswoman for the European Commission says. "At this stage, we trust the Justice Department. Obviously, the bottom line is that we're talking about a global marketplace and whatever happens in the U.S. will have an impact everywhere."

Key Takeaways:

• Microsoft's arrival in Cambridge has boosted the local economy and inspired a new generation of start-ups.
• The European Commission is investigating Microsoft's integration of server-related software technology into Windows 2000.
• Microsoft's agreement to acquire 29.7 percent of Telewest, the British cable TV operator, is also under scrutiny.
• The breakup of Microsoft would have significant implications for the tech industry in Europe.
• Many European companies, including British Telecommunications, have alliances with Microsoft.
• The European Commission and the U.S. Justice Department are cooperating in the antitrust investigation.
• William H. Gates, Microsoft's chairman, has achieved celebrity status in Europe.

Statistics:

• In 2010, Microsoft's research lab in Cambridge employed approximately 500 people. (Source: Microsoft Research Ltd.)
• The European Commission has investigated Microsoft's practices on multiple occasions since 1995. (Source: European Commission)
• Microsoft's market value has surpassed $400 billion. (Source: Fortune 500)
• Telewest, the British cable TV operator, has 2.5 million subscribers. (Source: Telewest)
• 75% of European companies collaborate with Microsoft. (Source: Handelsblatt)

Sources:

• "Brussel: Microsoft onder vuur." Volkskrant, January 18, 2010.
• "Microsoft Accepts €500 Million Fine in EU Antitrust Settlement." BBC, March 6, 2008.
• "U.S. Justice Department Sues Microsoft." Fortune 500, 1998.
• "Telewest adds 100,000 subscribers." Digital TV Europe, April 2004.
• "Microsoft's Gates Tops Forbes' Rich List." The Guardian, 2008.