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Microsoft Responds To RealNetwork's Antitrust Suit

Contends its media player can be hidden from view if wanted and consumers benefit either way.
Microsoft argued that its conduct in breaking into the digital media field "constitutes permissible competitive activity" and accused rival RealNetworks Inc. of using an antitrust lawsuit to gain market share. The Redmond-based company was responding Friday to an antitrust lawsuit that Seattle-based RealNetworks filed last December in U.S. District Court in San Jose, Calif.

Microsoft's response, filed Friday, indicated, as expected, that the software giant would vigorously defend itself.

RealNetworks claimed Microsoft violated state and federal antitrust laws, and accused Microsoft of illegally tying its Windows Media Player software to copies of the ubiquitous Windows operating system, regardless of whether users wanted the digital media-player system.

RealNetworks claimed that has made competition difficult for its own RealOne software, "resulting in substantial lost revenue and business for RealNetworks," according to the lawsuit.

The charges are similar to those brought by the European Commission, which has accused Microsoft of trying to quash competition by including its media player with Windows.

In a statement Friday, Microsoft argued that, while its media player cannot be uninstalled from Windows, the system can be hidden from view. The company also argued that its actions, instead of destroying competition, have benefited consumers because the competitive market has prompted "rapid innovation."

RealNetworks spokesman Greg Chiemingo said his company believes Microsoft "has pursued a broad course of predatory conduct."

But Chiemingo wouldn't comment on the specifics of Microsoft's response, saying that RealNetworks prefers the case to be argued in court.

"It's to be expected that they would deny our claims, and we stand by the case that we filed," he said.

Last month, Microsoft said it would seek to have the suit moved to a federal court in western Washington from the federal court in San Jose.

Microsoft argued that it believes a court in Washington is a better venue since both companies are based there. Chiemingo has said previously that RealNetworks filed the lawsuit in California because it believes that many of its potential witnesses are in that area, and the company thought it would be more convenient for those potential witnesses.

Shares in RealNetworks rose 6 cents to close at $6.08 on the Nasdaq Stock Market, where Microsoft shares rose 11 cents to close at $26.57.

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