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LUXEMBOURG, Apr 27: European Union judges will probe again on Thursday Microsoft's challenge to a landmark decision that the software giant illegally muscled out rivals, in a week-long hearing that has become increasingly heated.

The company's critics kicked off Thursday's proceedings, before the judges' question and answer session, to explain why they thought its rivals had been quashed on the market.

A 13-judge panel at Europe's second-highest court, the Court of First Instance, is weighing whether to uphold the European Commission's decision to order Microsoft to change its business practices and fine it a record 497 million euros ($617 million).

A court ruling against the Commission would curtail its power as Europe's competition watchdog and allow Microsoft to pursue the business practices that have helped it become a household name around the world.

On Wednesday, Microsoft argued that the Commission's decision had shackled its ability to compete -- an argument that Europe's top antitrust authority dismissed as ''absurd'' and ''frivolous''.

In 2004, the Commission decided Microsoft must give rivals more information so their software could work smoothly with its Windows system, which runs on 95 percent of the world's computers, and not withhold data on grounds of intellectual property rights.

Microsoft's critics took to the stand to explain that competitors needed that information so their server software, used to print, log in and access files, could compete with Microsoft's own products.

''There are problems, they are getting worse, there is no effective competition,'' said James Flynn, representing ECIS, a coalition of international IT firms.

VISTA, MEDIA PLAYER

But the Commission's demands that Microsoft hand over the software information punished Microsoft's success, the company argued on Wednesday.

''We ... submit that the (Commission) decision is an attempt to reconfigure (how the) market works by handicapping the leading player in perpetuity,'' Microsoft lawyer Ian Forrester told the court.

Commission lawyer Anthony Whelan said Microsoft had merely been ordered to move back towards its earlier, more equitable pattern of doing business in the field.

Microsoft broke a previous pattern of conduct by refusing to supply such information, Whelan said, adding that sharing was a standard practice. He dismissed Microsoft claims that the Commission was continually increasing its demands.

The court is expected to take months to come to a verdict, but a ruling upholding the decision could spur the Commission to act again.

Competition Commissioner Neelie Kroes has already written to Microsoft Chief Executive Steve Ballmer expressing competition concerns surrounding its Vista operating system, not yet released.

On Monday, the hearing's first day, judges heard arguments on another key component of the antitrust decision that Microsoft illegally bundled its media player with Windows, thus taking away consumers' incentive to buy other player products.

The judges grilled the Commission on this issue on Tuesday, questioning its reasoning and conclusions, but Microsoft was not let off lightly either.

It was probed on internal memos that critics said indicated Microsoft's top brass planned a marketing strategy for the media player that had already been judged illegal by U.S. courts when it was used on Microsoft's Internet Explorer browser.

($1=.8057 euro)

REUTERS

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