European Court Rejects Appeal in Microsoft Antitrust Case

Joanne Cachapero
LUXEMBOURG — The European Court of First Instance on Monday rejected Microsoft Corp’s appeal of the European Commission’s 2004 ruling that the company had violated antitrust regulations by abusing its monopoly on computer operating systems.

The court ordered Microsoft to abide by the 2004 ruling and upheld a fine of $689.4 million against the company.

Presiding Judge Bo Vesterdorf said, “The court finds the commission did not err in assessing the gravity and duration of the infringement and did not err in setting the amount of the fine. Since the abuse of a dominant position is confirmed by the court, the amount of the fine remains unchanged.”

A statement from the European Commission competition commissioner Neelie Kroes said, “The court has upheld a landmark commission decision to give consumers more choice in software markets. Microsoft must now comply fully with its legal obligations to desist from engaging in anti-competitive conduct. The commission will do its utmost to ensure that Microsoft complies swiftly.”

The court’s ruling followed a five-day appeals hearing that was held in April.

The original 2004 decision was the result of a complaint filed in 1998 by Sun Microsystems over Microsoft’s refusal to disclose its confidential server protocols.

The initial complaint then led to further inquiries by the commission, questioning Microsoft’s practice of bundling its Windows Media Player into its dominant Windows operating system. After Microsoft began bundling its media player into Windows, it surpassed market leader RealNetworks and eventually gained 50 percent share of the global market, according to reports.

The commission had repeatedly fined Microsoft since the 2004 antitrust ruling.

Over the nine-year progression of the case, Microsoft has been fined nearly $1 billion, and has faced complaints from a roster of competing technology companies including IBM, Sun Microsystems, RealNetworks and Novell.

Reportedly, Microsoft said previously that it would not appeal a decision of the EU Court of First Instance to the European Court of Justice, Europe’s highest venue.

In a lengthy statement issued by Microsoft Senior Vice President and General Counsel Brad Smith, a portion read:

“We have been working hard over the last few years to address these issues. Everyone agrees, for example, that the version of Windows that we offer in Europe today is in compliance with the Commission’s 2004 decision, and I’m also gratified that we were able to have the kinds of constructive discussions with the European Commission last year that enabled us to bring to market Windows Vista in conformity with the Commission’s 2004 decision.

“In addition, there’s obviously a lot of work that has gone into our efforts to comply with the Commission’s terms with respect to communications protocols and our duty to license them, a duty that obviously was reaffirmed by the court’s decision today. We’ve made a lot of progress in that regard, and yet we all have to acknowledge that there are some issues that do remain open.

“As we read today’s decision more carefully, we’re hopeful that some aspects of it may add some clarity that will help us all implement these remaining parts of the decision. And as I said, if we need to take additional steps in order to comply with today’s decision, we will do so.”