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EU court rejects appeal by Microsoft

The software giant stifles competition, the court ruling says.

By MOLLY MOORE, Washington Post
Published September 18, 2007

PARIS - A European Union court Monday rejected Microsoft's appeal of a European antitrust order requiring it to share software information with rivals and pay a record $690-million in fines for quashing competition.

Consumer advocates and Microsoft officials said the ruling by the European Court of First Instance would have far-reaching implications for high-technology companies and other industries around the world.

European Competition Commissioner Neelie Kroes, who led the effort to force Microsoft to share technology rather than obligate consumers to buy only Microsoft software, said the decision "set an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high-tech industries."

Microsoft senior vice president and general counsel Brad Smith called the court ruling disappointing, but added that the software giant is "committed to complying with every aspect" of the decision.

The Luxembourg-based court wrote that it agreed with EU regulators who said Microsoft has "abused its dominant position" in the global software marketplace by stifling competition and undercutting innovation efforts by rivals, thus keeping prices excessively high.

Although Smith said the U.S.-based company has not decided whether to appeal the court decision, he appeared far more resigned and conciliatory toward European regulators than in the past, when Microsoft accused them of trying to curb innovation by forcing the company to give up its technology secrets.

Smith said at a news conference in Brussels that the decision "very clearly gives the commission quite broad power and quite broad discretion." Although the EU commission's demands cannot be enforced outside Europe, Smith said the implications of the case will affect "our industry and every other industry in the world."

The case centered on the commission's 2004 ruling that Microsoft used its near monopoly on the Windows operating system for desktop computers to compel consumers to buy its other software, such as Media Player, which allows users to access video and audio via the Internet.

Commissioner Kroes said Microsoft's efforts "hurt consumers and dampened innovation." She added that "in a world where 95 percent of PCs run Windows," Microsoft's abuse of its market position makes it difficult for users to share printers or documents unless they use Microsoft products, with smaller companies finding it virtually impossible to break into the market.

[Last modified September 18, 2007, 01:07:01]