Mi­crosoft dealt big de­feat by EU court

Com­pany un­sure itwill file an­other ap­peal

USA TODAY International Edition - - Money - By By­ron Aco­hido USA TO­DAY

SEAT­TLE — Mi­crosoft said Mon­day it has not de­cided whether to ap­peal a rul­ing handed down by Europe’s sec­ond high­est court af­firm­ing a land­mark 2004 an­titrust de­ci­sion that re­stricts the com­pany’s busi­ness prac­tices.

The Euro­pean Court of First In­stance re­jected Mi­crosoft’s re­quest to nul­lify sanc­tions handed down by the Euro­pean Com­mis­sion, in­clud­ing a record fine and an or­der forc­ing the soft­ware gi­ant to ad­just the way it sells it­sWin­dows op­er­at­ing sys­tem in Europe.

The rul­ing could em­bolden Europe’s an­titrust au­thor­i­ties to closely mon­i­tor how Mi­crosoft and other big tech com­pa­nies go about di­ver­si­fy­ing their prod­uct of­fer­ings. The court ruled against Mi­crosoft’s ar­gu­ments that its soft­ware should be treated as in­tel­lec­tual prop­erty that changes rapidly, thus re­quir­ing a dif­fer­ent approach.

“The rul­ing shows that the Com­mis­sion was right to make its de­ci­sion,” says Neelie Kroes, Europe’s an­titrust com­mis­sioner. “Mi­crosoft must now de­sist from en­gag­ing in anti-com­pet­i­tive con­duct.”

Kroes told re­porters reg­u­la­tors want to see “a sig­nif­i­cant drop” in Mi­crosoft’s mar­ket share.

“Now con­sumers might have a real choice, and tech­nol­ogy com­pa­nieswill have amuch bet­ter chance to com­pete on the­mer­its than ever be­fore,” said Thomas Vinje, a spokesman for the Euro­pean Com­mit­tee for In­ter­op­er­a­ble Sys­tems, a con­sor­tiu­mofMi­crosoft’s ri­vals.

Mi­crosoft has two months to ap­peal to Europe’s high­est court. But it­canon­ly­dosoon­the­mat­terof in­ter­pret­ing an­titrust laws, not on the facts of the case. The com­mis­sion hit Mi­crosoft with a $613 mil­lion fine, which the com­pany has paid, and or­dered it to pro­vide a ver­sion of Win­dows with­out the me­dia player built in. It also or­dered the com­pany tomake it eas­ier for pro­grams from ri­vals to run on it­sWin­dows server soft­ware.

Mi­crosoft’s gen­eral coun­sel, Brad Smith was non-com­mit­tal about what the com­pa­ny­will donext.

“As we read to­day’s de­ci­sion more care­fully, we’re hope­ful that some as­pects of it may add some clar­ity that will help us all im­ple­ment th­ese re­main­ing parts of the de­ci­sion,” says Smith.

The rul­ing un­der­scored ques­tions about how far gov­ern­ments should go to re­straint big tech com­pa­nies as they ex­pand into promis­ing new mar­kets.

Mi­crosoft, for in­stance, is­mov­ing for­ward with plans to in­te­grate an en­tire suite of In­ter­net-en­abled con­sumer and busi­ness ser­vices into Win­dows Vista, which it launched in Jan­uary.

Mi­crosoft has be­gun to openly ques­tion how its strat­egy dif­fers from Nokia in­te­grat­ing cam­eras into its cell­phones or Ap­ple get­ting into the cell­phone busi­ness, says James Gov­er­nor, Lon­don-based tech in­dus­try an­a­lyst at re­search fir­mRedMonk.

“Why is it that you can buy your way into dif­fer­ent mar­kets, but you can­not bun­dle your way into dif­fer­ent mar­kets?” says Gov­er­nor. “It’s time to move on and ask some of th­ese tough ques­tions.”


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