[A2k] EU court rejects Microsoft appeal

Mon Sep 17 06:33:00 2007

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<div class="headline"> <span class="headlinetext"><a class="moz-txt-link-freetext" href="http://www.iht.com/articles/2007/09/17/business/msft.php">http://www.iht.com/articles/2007/09/17/business/msft.php</a><br>
<br>
EU court rejects Microsoft appeal</span> </div>
<div> <span class="bylinetext"> By Kevin J. O'Brien<br>
</span> </div>
<div class="pubdate"> <span class="pubdatetext">Monday, September 17,
2007</span> </div>
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<p><strong>LUXEMBOURG:</strong> In a stinging rebuke to the world's
largest software maker,
the second-highest European court rejected Monday a request by
Microsoft to
overturn a 2004 European Commission antitrust ruling that the company
had
abused its dominance in computer operating systems.</p>
<p>The European Court of First Instance, in a starkly worded summary
read to a
courtroom of about 150 journalists and lawyers here, ordered Microsoft
to
obey a March 2004 commission order and upheld the €497.2 million, or
$689.4
million, fine against the company.</p>
<p>The court's presiding judge, Bo Vesterdorf, reading a summary of the
decision on his final day in office, 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."</p>
<p>"The court said the commission wins on virtually everything," said
Thomas
Vinje, a partner at the law firm Clifford Chance and part of the legal
team
for the European Committee for Interoperable Systems, a coalition that
includes Microsoft opponents like IBM. "The court has spoken. The
commission was right."</p>
<p>Neelie Kroes, European Union competition commissioner, urged
Microsoft to
"comply fully" with the 2004 antitrust ruling. "The court has upheld a
landmark commission decision to give consumers more choice in software
markets," Kroes said in a statement. "Microsoft must now comply fully
with its legal obligations to desist from engaging in anticompetitive
conduct."</p>
<p>Brad Smith, the general counsel for Microsoft, who was present for
the
reading, said the company would follow the ruling but did not say
specifically whether the company would appeal it.</p>
<p>"It's clearly very important to us as a company that we comply with
our
obligations under European law. We will study this decision carefully
and
if there are additional steps that we need to take, we will take them,"
Smith said.</p>
<p> Robert Kramer, a vice president of public policy for CompTIA, a
Microsoft ally that represents 3,000 technology companies, predicted
the
court's ruling would have a chilling effect on investment both within
the
European Union and beyond.</p>
<p> "What this ruling will do is send a message to companies that if
they
establish a good market position with a successful product, they will
be
forced in Europe to essentially give up that product to their
competitors," Kramer said.</p>
<p> But Carlo Piana, a lawyer representing the Free Software Foundation
Europe, called hailed the court's decision as a victory for small
software
developers around the world who may have lived in fear of Microsoft or
other large platform operators. "This is an incredibly huge victory.
The
doors are kept open now for competition," Piana said.</p>
<p> The decision followed a five-day hearing on the issues in November
2006.
Microsoft has indicated in the past that it would appeal any negative
ruling to the European Court of Justice, the highest court in Europe,
but
Smith would not say on Monday whether the company would take that step
in
the two months and 10 days it has to. An appeal by the company, a
process
likely to take at least two years, would focus only on whether the
appellate court erred in procedure in reaching its decision, not on the
facts in the case.</p>
<p>Microsoft has already been forced to pay nearly €1 billion in fines
in the
nine-year-old legal case, which has pitted the software maker based in
Redmond, Washington, against the commission and a host of competitors,
including IBM, Sun Microsystems, RealNetworks and Novell.</p>
<p>In its ruling, the 13-member panel of judges said Microsoft had
violated
European antitrust law by exploiting its near dominance in operating
systems to shut out competitors like RealNetworks in digital media
players
and Sun Microsystems in workgroup exchange servers.</p>
<p>The ruling validated the pursuit of Microsoft by Mario Monti, former
competition commissioner for the European Union, and his successor,
Neelie
Kroes. The case began in 1998 when Sun Microsystems filed a complaint
over
Microsoft's refusal to disclose its confidential server protocols —
computer code that competitors need to make their servers or desktop
computers work with Microsoft products.</p>
<p>Microsoft has been repeatedly fined by the commission since the 2004
antitrust ruling for inadequately supplying the protocols. "I think
this
means it's about time for Microsoft to comply," Vinje said.</p>
<p> The commission later expanded its inquiry to include 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
overtook the market leader, RealNetworks, and as of January it had a 50
percent share of the global market, according to the researcher
Nielsen/NetRatings.</p>
<p> "There has obviously been a lot of work that has gone into our
efforts
to comply with the commission's terms with respect to communications
protocols," Smith said in Luxembourg on Monday. "We have made a lot of
progress in that regard and yet we all have to acknowledge that there
are
some issues that do remain open."</p>
<p>Stephen Castle contributed reporting from Brussels.</p>
</div>
<pre class="moz-signature" cols="72">-- 
Vera Franz
Program Manager
Information Program
&lt;<a class="moz-txt-link-abbreviated" href="http://www.soros.org/ip">www.soros.org/ip</a>&gt;
Open Society Foundation
100, Cambridge Grove
London W6 0LE
phone +44 20 7031 0219
fax +44 20 7031 0247</pre>
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