EU court crushes Microsoft's antitrust appeal
Published: 17 Sep 2007 09:21 BST
…he remains hopeful the court's order will bring further clarity to the issue.
"We have been working hard over the last few years to address these issues," Smith said. "Everyone agrees, for example, that the version of Windows that we offer in Europe today is in compliance with the Commission's 2004 decision."
Nonetheless, the court chided Microsoft on its behaviour regarding interoperability issues.
"The court considers that the Commission was correct to conclude that the work group server operating systems of Microsoft's competitors must be able to interoperate with Windows domain architecture on an equal footing with Windows operating systems if they are to be capable of being marketed viably... The absence of such interoperability has the effect of reinforcing Microsoft's competitive position on the market and creates a risk that competition will be eliminated," the court said in its ruling.
Microsoft and the Commission had particularly strong disagreements over the issue of interoperability, with Microsoft and the Commission clashing on the extent to which the company's technical information should be shared with rivals.
"The court rejects Microsoft's claims that the degree of interoperability required by the Commission is intended in reality to enable competing work group server operating systems to function in every respect like a Windows system and, accordingly, to enable Microsoft's competitors to clone or reproduce its products," the court said.
A number of Microsoft competitors have previously weighed in on the interoperability issue in complaints to the Commission. These include the European Committee for Interoperable Systems (ECIS), a non-profit trade association that includes as members Adobe, IBM, Oracle, RealNetworks, Red Hat and Sun.
"This landmark judgment sets a clear standard for Microsoft's future conduct and empowers the European Commission to impose it in the European market when necessary," said Thomas Vinje, a spokesman and legal counsel for ECIS.
Linux distributor Red Hat also voiced its support for the court's decision.
"In our business, interoperability information is critically important and cannot simply be withheld to exclude all competition… We were pleased with the overall decision and look forward to examining the decision in greater detail," Matthew Szulik, Red Hat's chief executive, said in a statement.
Similar views were expressed by the Software & Information Industry Association (SIIA).
"After one of the most thorough investigations in the history of competition law, spanning over seven years, the Commission has taken a steady and decisive course," Ken Wasch, SIIA president, said in a statement. "We applaud the leadership and persistence of the European Commission."
But another trade group, the Computing Technology Industry Association (CompTIA), which includes Microsoft as a member, expressed disappointment with the ruling, labelling it a blow to "free enterprise in Europe".
In addition to the interoperability issue, the court sided with the Commission on the bundling of separate software products, citing three areas that affected its decision. One was the company in question must have a dominant position in the market for the tying product, such as the Windows operating system; secondly, the tying product and tied product — in this case Windows and Windows Media Player — must be two separate products; and thirdly, consumers don't have a choice to obtain the tying product without the tied product.
"The court considers that the factors on which the Commission based its conclusion that there was abusive tying are correct and consistent with Community law."
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Was the EU Court of First Instance right to dismiss Microsoft's antitrust appeal?
RealNetworks, which makes the RealPlayer media player, had raised such an issue in the past, eventually reaching a $460m (£227m) settlement to address antitrust claims with Microsoft in 2005. Microsoft also agreed to pay RealNetworks $310m (£153m) to support RealNetworks' movie and game business.
In recent years, the software giant has been paying multi-million-dollar settlements to its rivals to address previous antitrust litigation. Microsoft also paid long-time rival Sun $700m (£345m) to settle antitrust disputes with the company over interoperability issues and another $900m (£443m) over patent issues.
Legal experts previously weighed in on what a favourable court ruling would do for the Commission. Some legal experts said that, with a favourable court ruling in the Microsoft case, the Commission would be likely to remain on its current aggressive track in pursuing antitrust cases, whereas an unfavourable ruling would have likely "taken the wind out of its sails".
Reuters contributed to this report.
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