European court upholds Microsoft anti-trust ruling

MONOPOLY: The 248-page ruling backed the European Commission's opinion that Microsoft's practice of selling media software bundled with Windows had hurt its rivals

AP , LUXEMBOURG

Tue, Sep 18, 2007 - Page 1

A EU court yesterday squashed Microsoft Corp's legal challenge to a landmark antitrust ruling and record fine, a resounding victory for the EU that confirms its role as a major global regulator.

The European Court of First Instance dismissed the software giant's appeal of the EU order that ordered it to share communications code with rivals and sell a copy of Windows without Media Player.

It also upheld a 497 million euro (US$613 million) fine -- the largest ever levied by EU regulators.

The court ruled against Microsoft on both parts of the case, saying the European Commission was correct in concluding that Microsoft was guilty of monopoly abuse in trying to use its power over desktop computers to muscle into server software.

Microsoft said it would withhold any comment on the decision or whether it would appeal to the EU's highest court, the European Court of Justice -- it has two months to do so -- until it had gone through the 248-page ruling.

"I don't want to talk about what will come next," said Microsoft lawyer Brad Smith about the possibility of an appeal. "We need to read the ruling before we make any decision."

Speaking outside the room where the ruling was issued, Smith sounded conciliatory, however, saying, "we look forward to complying with today's decision."

The commission welcomed the ruling, without giving details.

The EU court also said regulators had clearly demonstrated that Microsoft's selling of media software with Windows had hurt rivals.

"The court observes that it is beyond dispute that in consequence of the tying consumers are unable to acquire the Windows operating system without simultaneously acquiring Windows Media Player," it said. "In that regard, the court considers that neither the fact that Microsoft does not charge a separate price for Windows Media Player nor the fact that consumers are not obliged to use that Media Player is irrelevant."

Thomas Vinje, a lawyer for the European Committee for Interoperable Systems -- an industry group that includes Microsoft rivals Sun Microsystems Inc, IBM Corp and Oracle Corp -- heralded the decision as a door opener for "dynamic competition in the software industry."

"No more blaming the Commission for lack of clarity nor more excuses about complexity," Vinje said. "The provision of interoperability information is common software industry practice. Microsoft knows full well what is required and how to provide it and now just needs to do it."

Microsoft did get a small victory, as the court overturned the decision to appoint a monitoring trustee to watch how the company had complied with the ruling.