Microsoft Fails to Suspend EU Antitrust Ruling

On December 22, 2004, the European Court of First Instance (Court) ordered Microsoft Corp (Microsoft) to comply with the penalties previously imposed by the European Commission (Commission) in its landmark antitrust ruling of last March. As previously reported in E-TIPS™ (Vol 2, No 21, March 31, 2004), the Commission found that Microsoft had abused its monopoly in operating systems to stifle competition in the markets for server and digital media software. As a result, the Commission ordered Microsoft to pay a record fine of €497.2 million (over US$600 million), to disclose and license technical information to competitors and to offer a version of Windows in Europe without its bundled Media Player. Microsoft appealed to the Court and brought an application for interim relief, seeking to suspend the March order. A number of arguments were raised in the application, including that the enforcement of remedies would infringe Microsoft's intellectual property rights, that Microsoft would be forced to abandon the fundamental design concepts underlying its Windows systems, and that prevailing market conditions would be irreversibly changed to its disadvantage. The Court, however, found that Microsoft failed to show it would suffer "serious and irreparable harm", and dismissed the application in its entirety. Microsoft has now paid the fine and has launched a web site to make its communication protocols available to competitors as potential licensees. The company also plans to offer manufacturers a version of Windows excluding Media Player for the European market sometime this month, although consumer demand for such a product is yet uncertain. According to some observers, the decision may have set a legal precedent that could interfere with Microsoft's ability to bundle more features into versions of its operating systems, ultimately affecting how Microsoft builds its future products. That may not be clear until the Court makes a determination on the merits of the case. Microsoft has until late February to appeal the Court's decision rejecting interim relief to the European Court of Justice. For the full text of the decision, see: http://eumicrosoftdecision.notlong.com/. For related news reports, visit: http://makeashorterlink.com/?X5DD1273A; http://biz.yahoo.com/ap/041222/eu_microsoft_25.html; or http://seattlepi.nwsource.com/business/204918_msfteu23.html. Summary by: Rosa Kim