Price regulator fires warning shot at Microsoft

Switzerland's price regulator is investigating pricing practices by the United States software group, Microsoft, following complaints by consumer groups that software products cost more in Europe than in the US.

Switzerland’s price regulator is investigating pricing practices by the United States software group, Microsoft, following complaints by consumer groups that prices in Europe are higher than in the US.

A statement from the price regulator, Werner Marti, said that the Windows 98 operating system and the Office 97 Professional productivity software suite showed there were “effectively significant price differences to the disadvantage of Swiss consumers.” He added that this was also the case for Office 2000.

“We’ve done some Internet research and we see that there is a tendency for prices to be higher in Europe than in the US”, Marti told Swiss Radio International. “There are also some differences between European countries, with Swiss prices higher there too.”

Marti said it was difficult to say at this stage if the pricing differences were justified by higher costs in Switzerland, but he issued a warning to Microsoft should the investigation find grounds for customer complaints.

“If the prices are artificially high and there are no reasons for it, we have a price surveillance act and we can ask Microsoft to lower prices,” said Marti. “First, we have to negotiate an agreement but if Microsoft refuses we have the possibility to lower the prices.”

Marti could not say when his inquiry would be completed but that it was among his priorities for the year. The price regulator is a state official with the power to intervene in cases of pricing disputes.

The announcement is another blow to Microsoft which is already the subject of anti-trust investigations by the US Justice Department and the European Union.

By Michael Hollingdale