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A computer industry lobby group filed a complaint about Microsoft's Windows XP operating system to the European Commission antitrust department Tuesday, as the European regulator nears the end of an investigation into earlier operating system products from the software group.

Crucial issues are at stake with regard to innovation and competition in the software industry, the Computer and Communications Industry Association said in a news conference Tuesday morning.

"XP clearly violates European Union competition law," said Ed Black, president and chief executive officer of the trade association.

Two Complaints

The complaint has two strands: first, that XP allows Microsoft to preserve an existing monopoly situation, and second that it allows the software giant to leverage this dominance into new markets, said Thomas Vinje, legal adviser to the CCIA and a partner in the Brussels office of law firm Morrison & Foerster.

"Microsoft is using well-honed practices to achieve its end, and it is using them with XP more than ever before," Vinje said.

The new complaint accuses Microsoft of bundling its Outlook Express e-mail software, Movie Maker video editing software, Instant Messenger on-screen messaging program, and Media Player software into Windows XP.

It also accuses Microsoft of leveraging its operating systems might into Internet-related markets, and into markets for mobile phone operating systems.

Passport Problems

In addition the CCIA alleges that Windows XP gives an unfair advantage to Microsoft's e-commerce trading platform, .Net, by steering purchasers of XP towards signing up for the .Net authentication service called Passport.

.Net Passport is the most developed online authentication system available at present. Next year a similar system will be launched by the Liberty Alliance, a loose group of companies that have agreed to use a common, open source platform largely developed by Sun Microsystems, to offer their services and goods online.

European Commission spokesperson for competition issues Amelia Torres confirmed that the complaint has been submitted. "We received the complaint on January 31. We will look into it," she said.

Microsoft spokesperson Tiffany Steckler declined to comment in detail about the new complaint. "The allegations seem similar to the ones the CCIA made in the U.S. It is up to the European Commission to decide what issues are relevant to its probe. We have always said we are eager to work with the Commission to find a positive solution to the issues," she said.

The CCIA represents computer electronics and phone groups including Eastman Kodak, Fujitsu, Nokia, and NTT Communications, and three of Microsoft's biggest direct competitors, Sun Microsystems, AOL Time Warner, and Oracle.

Fast Action Asked

Microsoft's rivals don't want this new complaint to delay a ruling in the existing antitrust case, said CCIA legal advisor Vinje. "We want the commission to make a decision in the existing case as soon as possible. We hope it will set important precedents," he said.

The wording of the statement of objections in the commission's case against previous versions of Windows is very specific. The bundling accusations refer only to Media Player, which has already eclipsed its nearest rival, Real One Player, just as Microsoft's Web browser, Internet Explorer, has defeated its nearest rival, Netscape Navigator.

"Unless the commission acts rapidly in these sorts of cases, competition law will be rendered meaningless in such fast-moving technology markets," Vinje said. "We are presenting this complaint in such a way that the commission can take action to preserve competition and innovation in these markets before the competitors are decimated."

The Web browser market is an example of what happens if there is no viable alternative to a Microsoft product, he said. "Look at Microsoft Internet Explorer: It is the same now as it was five years ago. Microsoft doesn't need to innovate because there is no serious competitor to Explorer any more," Vinje said.

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