European Court to Microsoft: You Lose

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The European Union’s second highest court Monday turned down most of Microsoft’s appeal of its 2004 antitrust ruling by the European Commission (EC).

Ruling from Luxembourg, the European Court of First Instance (CFI) upheld the EC’s March 2004 decision that the company was in breach of European competition law through the abuse of its dominant market position.

Microsoft had appealed that order, but today the CFI sided with the EC on all but one matter. The findings, which have been anticipated for months, were announced at 9:30 a.m. local time in Luxembourg.

A win for the EC in the case has been widely seen as liable to embolden the commission in its probes into Intel, Apple and Google. The ruling may also motivate the EC to take an even harder look at Windows Vista and other Microsoft technologies and business practices.

A senior Microsoft executive made a brief statement following the release of the appeals ruling, mostly to say that the company had not yet had the opportunity to read the 248-page ruling.

“We need time to read the decision first,” Microsoft general counsel Brad Smith told reporters during a short televised press conference following the ruling. The company plans a more detailed press conference later today, once officials have had a chance to examine the ruling.

The EC’s 2004 ruling ordered Microsoft to share protocol information with competitors in the workgroup server market, which the company had defended as being proprietary information. The CFI found the EC was well within its rights to demand that Microsoft license that information in order to enable interoperability among products in that market.

Additionally, the CFI found that the EC was also correct in deciding that Microsoft had illegally tied Windows Media Player to Windows. Microsoft now offers a version of Windows in Europe that does not include WMP.

Where the CFI differed with the EC, interestingly, is in the area of whether the EC had the power to legally appoint an external trustee to monitor Microsoft’s progress in fulfilling the EC’s remedies. The CFI decided it did not, although the question appears to be more one of degree.

“By establishing the mechanism of a monitoring trustee, with his own powers of investigation and capable of being called upon to act by third parties, the Commission went far beyond the situation in which it appoints its own expert to advise it during an investigation,” the CFI said in a statement.

Finally, the CFI let the fines that the EC had imposed to stand. Microsoft was fined a total of $970 million — an initial $613 million in March 2004 and then, two years later, an additional $357 million as penalty for dragging its feet in delivering interoperability documentation to the EC’s trustee.

Microsoft presented its appeal to the CFI in April 2006.

This article was first published on InternetNews.com. To read the full article, click here.