Microsoft dealt big defeat by EU court
Company unsure itwill file another appeal
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.”