EU court confirms the 497 million euro fine against Microsoft

By EDRi · September 26, 2007

Microsoft has lost the appeal made to the Court of First Instance against
the European Commission’s (EC) ruling of monopoly abuse that obliged
Microsoft to grant competitors access to its server protocols and to
unbundle its Media Player software from its Windows operating system .

The case has a long history; following a complaint in 2003 from Novell that
accused Microsoft of making server protocol information unavailable, the
European Commission gave a preliminary ruling ordering Microsoft to
unbundled Windows Media Player from Windows and to give information to
competitors to ensure compatibility with Windows servers. Considering
Microsoft had not complied with that ruling, in March 2004, the European
Commission fined Microsoft with the highest fine in the EU history – 497
million euro.

Microsoft paid the fine but made an appeal to the Court of First Instance
which, on 17 September 2007 rejected this appeal with the exception of a
small part related to the appointment be the EC of a monitoring trustee
“with the power to have access, independently of the Commission, to
Microsoft’s assistance, information, documents, premises and employees and
to the source code of the relevant Microsoft products”. The costs related to
the trustee were to be supported by Microsoft.

“The Court finds that 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 at EUR 497 million” said the
official press release of the Court.

Following the decision, José Manuel Barroso, President of the European
Commission stated: “This judgement confirms the objectivity and the
credibility of the Commission’s competition policy. This policy protects the
European consumer interest and ensures fair competition between businesses
in the Internal Market.”

The decision was considered by Competition Commissioner Neelie Kroes as a
great victory: “That decision set an important precedent in terms of the
obligations of dominant companies to allow competition, in particular in
high tech industries. The Court ruling shows that the Commission was right
to take its decision. 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 decision was largely welcomed by several organisations.
“Microsoft can consider itself above the law no longer. Through tactics that
successfully derailed antitrust processes in other parts of the world,
including the United States, Microsoft has managed to postpone this day for
almost a decade. But thanks to the perseverance and excellent work of the
European Commission, these tactics have now failed in Europe” said Georg
Greve’s, president of the Free Software Foundation Europe. Open Forum Europe
also stated: “OpenForum Europe welcomes this decision, and looks to the
whole ICT industry to respond by taking positive steps to increase
competitive choice.”

The reaction of the U.S. Department of Justice was, not surprinsingly, a
critical one to the decision of the Court of First Instance and Thomas O.
Barnett, the assistant attorney general for antitrust, declared on 17
September that the decision would have “the unfortunate consequence of
harming consumers by chilling innovation and discouraging competition.”

In response to this statement, Neelie Kroes considered the US officials’
judgement as totally unacceptable: “The European Commission does not pass
judgement on rulings by U.S. courts and we expect the same degree of respect
from U.S. authorities on rulings by EU courts,” she said.

Microsoft’s top lawyer said that the first priority of the company was to
comply with EU competition law and that the company has not yet taken any
decision related to the next legal steps. Microsoft has two months to appeal
the decison to the European Court of Justice.

Press Release No 63/07 – Judgement of the Court of First Instance in Case
T-201/04 -Microsoft Corp. v Commission of the European Communities

Court dismisses Microsoft appeal in antitrust case (17.09.2007)

Microsoft loses anti-trust appeal (17.09.2007)

AUS Faults US Comment on Microsoft Ruling (19.09.2007)

EDRI-gram: Microsoft gets record-breaking fine (24.03.2004)