Friday

29th Mar 2024

Microsoft case sets precedent, says Brussels

  • A happy commissioner (Photo: EUobserver)

An EU court has upheld a European Commission decision to fine software giant Microsoft €497 million for abusing its dominant market position and to order the US-based company to share information on its programming systems.

The EU's second highest court – the Court of First Instance (CFI) - on Monday (17 September) went against Microsoft's appeal case to annul the EU executive's 2004 decision, with Brussels calling it an "important precedent" for other antitrust cases.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"The court…essentially upholds the commission's decision finding that Microsoft abused its dominant position," the CFI stated, adding that it had annulled certain parts of the decision relating to the appointment of a so-called "monitoring trustee", which it said had no legal basis in EU law.

The EU executive welcomed the ruling. Commission president Jose Manuel Barroso said that the judgment "confirms the objectivity and the credibility of the commission's competition policy."

"This policy protects the European consumer interest and ensures fair competition between businesses in the [EU's] internal market," he said in a statement after the verdict.

"Today's court ruling…shows that the Commission was right to take its decision, and right to take firm action to enforce that decision," EU anti-trust commissioner Neelie Kroes told journalists in Brussels.

"This is an important precedent, not just for this particular product on this particular market," she said, adding that the EU executive will take the background of the court decision into account in ongoing and future anti-trust cases.

Case has impact on Microsoft's future

Microsoft expressed disappointment with the verdict and said it would evaluate the ruling before deciding on whether to appeal the CFI verdict.

"I think we need to read the decision before we make any kind of decisions," Microsoft's chief lawyer Brad Smith told journalists after the ruling.

"This decision…certainly has a great deal to say about the future of our company, our industry and competition law…in Europe," he added.

Without being too specific, he explained that Microsoft had to think about the message which the court ruling gave also in a "more general sense."

"The first and most important for us to address [now]…is what we are doing and will do to ensure that we comply with this decision," Mr Smith said, adding that Microsoft "may need to take additional steps because of today's decision."

The US-based software firm reported a global revenue of €36.83 billion in the 2007 fiscal year, while more than 90 percent of the world's computers run Microsoft's Windows PC operating system.

The case

The case concerned two issues; the integration of the Windows media player and the interoperability between the Windows operating system and externally made programmes, as well as the compulsive licensing of Microsoft's communication server protocols.

An investigation by the commission's antitrust department concluded in March 2004 that Microsoft was squeezing out competition in the media player market and prevented other software developers from making products that work with Windows by holding back technical information.

The EU antitrust regulator told Microsoft to share some of its source code allowing rivals to make compatible software products, as well as imposing the fine.

However, Microsoft challenged the 2004 decision arguing that the commission acted unlawfully when trying to force it to share its source code.

The company said the commission is trying to make new rules that would force successful companies to share the fruits of their research with less successful rivals.

Either party can appeal the decision to the European Court of Justice – the EU's highest court – within two months and ten days.

The nearly half a billion euro fine is currently locked into a bank account collecting interest and awaiting whether either side wants to appeal the CFI ruling.

If no appeal is submitted within the deadline, then the large sum of money plus the interest will go into the EU budget with EU member states having to pay a little less into the bloc's coffers next year.

If an appeal is made, the millions of euro will stay put and await another court ruling.

EU Parliament set to sue EU Commission over Hungary funds

The European Parliament will likely take the European Commission to court for unblocking more than €10bn in funds for Hungary last December. A final nod of approval is still needed by European Parliament president, Roberta Metsola.

EU Commission clears Poland's access to up to €137bn EU funds

The European Commission has legally paved the way for Poland to access up to €137bn EU funds, following Donald Tusk's government's efforts to strengthen the independence of their judiciary and restore the rule of law in the country.

Opinion

Potential legal avenues to prosecute Navalny's killers

The UN could launch an independent international investigation into Navalny's killing, akin to investigation I conducted on Jamal Khashoggi's assassination, or on Navalny's Novichok poisoning, in my role as special rapporteur on extrajudicial executions, writes the secretary-general of Amnesty International.

Opinion

I'll be honest — Moldova's judicial system isn't fit for EU

To state a plain truth: at present, Moldova does not have a justice system worthy of a EU member state; it is riven with corruption and lax and inconsistent standards, despite previous attempts at reform, writes Moldova's former justice minister.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us