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Pay Up, (Microsoft)
MS suffers stunning EU anti-trust defeat
BRUSSELS: Microsoft lost its appeal of a European Union antitrust ruling, forcing the world’s biggest software maker to pay a record e497 million ($689 million) fine and help rivals connect their products to the Windows operating system.
The European Court of First Instance in Luxembourg on Monday backed the European Commission’s 2004 decision that ordered the US company to disclose proprietary data and strip music and video software from a version of Windows. The judgment, after three years of legal wrangling, can be appealed to the European Court of Justice, the EU’s highest court.
Microsoft, which reached a settlement with US authorities in 2002, has argued that the EU is pursuing the illegal disclosure of trade secrets and wants a veto over features on software that runs on about 95% of the world’s personal computers. The judgment bolsters probes by Competition Commissioner Neelie Kroes of Intel, Rambus and Qualcomm.
“This is deeply troubling for business, the state of the law and trans-Atlantic relations,” said Philip Marsden, a competition lawyer and senior research fellow at the British Institute of International and Comparative Law. “The ruling shows a total diversion between the US and Europe.” Microsoft shares fell 2.4% to $28.35 as of 12:59 p.m. in Frankfurt trading.
Microsoft general counsel Brad Smith said the company will study the decision carefully. “If there are additional steps that we need to take in order to comply with it we will take them,” Smith told reporters outside the courtroom. “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,” the tribunal said in its 248-page judgment. The court upheld part of the appeal on whether Microsoft must pay for monitoring its compliance.
The EU’s Kroes said in a briefing in Brussels that the court’s judgment shows that the regulator’s decision was correct. There is “no doubt” that Microsoft’s market share will change as a result of the EU’s order, she said. “A market share of much less than 95% would be a success,” Kroes said. “A significant drop in share is what we would like to see,” she said.
“That 2004 decision set an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high tech industries,” Kroes said. “The decision upheld by the court is particularly important because so many people use computers, be they individual consumers, schools, businesses or governments.”
The EU case against Microsoft started with a 1998 complaint by Sun Microsystems. The commission, the EU’s antitrust authority in Brussels, began investigating whether Redmond, Washington-based Microsoft used its dominance in desktop PCs to quash competition in related markets, such as servers.
BRUSSELS: Microsoft lost its appeal of a European Union antitrust ruling, forcing the world’s biggest software maker to pay a record e497 million ($689 million) fine and help rivals connect their products to the Windows operating system.
The European Court of First Instance in Luxembourg on Monday backed the European Commission’s 2004 decision that ordered the US company to disclose proprietary data and strip music and video software from a version of Windows. The judgment, after three years of legal wrangling, can be appealed to the European Court of Justice, the EU’s highest court.
Microsoft, which reached a settlement with US authorities in 2002, has argued that the EU is pursuing the illegal disclosure of trade secrets and wants a veto over features on software that runs on about 95% of the world’s personal computers. The judgment bolsters probes by Competition Commissioner Neelie Kroes of Intel, Rambus and Qualcomm.
“This is deeply troubling for business, the state of the law and trans-Atlantic relations,” said Philip Marsden, a competition lawyer and senior research fellow at the British Institute of International and Comparative Law. “The ruling shows a total diversion between the US and Europe.” Microsoft shares fell 2.4% to $28.35 as of 12:59 p.m. in Frankfurt trading.
Microsoft general counsel Brad Smith said the company will study the decision carefully. “If there are additional steps that we need to take in order to comply with it we will take them,” Smith told reporters outside the courtroom. “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,” the tribunal said in its 248-page judgment. The court upheld part of the appeal on whether Microsoft must pay for monitoring its compliance.
The EU’s Kroes said in a briefing in Brussels that the court’s judgment shows that the regulator’s decision was correct. There is “no doubt” that Microsoft’s market share will change as a result of the EU’s order, she said. “A market share of much less than 95% would be a success,” Kroes said. “A significant drop in share is what we would like to see,” she said.
“That 2004 decision set an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high tech industries,” Kroes said. “The decision upheld by the court is particularly important because so many people use computers, be they individual consumers, schools, businesses or governments.”
The EU case against Microsoft started with a 1998 complaint by Sun Microsystems. The commission, the EU’s antitrust authority in Brussels, began investigating whether Redmond, Washington-based Microsoft used its dominance in desktop PCs to quash competition in related markets, such as servers.
So, looks like they are going to pay after all.
A serious question for Europeans (and Asher), what exactly are you guys whining about? What innovation or tool is unavailable to you because of Microsoft? We have the same products in the US and we are not trust busting them. Whats the beef? Is it just a pride thing?
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