Thursday

6th Oct 2022

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

Become an expert on Europe

Get 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.

MEPs condemn EU Commission 'leniency' on Hungary

MEPs criticised the EU Commission for what they see as the executive not being tough enough on the government of Viktor Orbán, as Hungary's parliament passed new legislation as part of a deal with the EU executive.

EU adding Bahamas to tax-haven blacklist

The EU is adding Anguilla, the Bahamas, and Turks and Caicos Islands to its blacklist of tax-havens, in what some have called a "fig-leaf" exercise.

'No decision expected' for EU decision on unanimous decisions

Swedish minister for European affairs Hans Dahlgren told EUobserver no decision can be expected on majority vote next year. Mikuláš Bek, the Czech minister for European affairs, said enlargement and changes to the decision-making are politically interlinked.

Opinion

What von der Leyen's 'State of Union' didn't mention

Ursula von der Leyen barely noticed that European democracy is under attack not only from external threats, but from within. Two of the world's leading autocratic countries are EU member states.

News in Brief

  1. Thousands of Hungarian students and teachers protest
  2. Swedish MEP cuts hair mid-speech to support Iran women
  3. Danish general election called for 1 November
  4. Slovenia legalises gay marriage, adoption
  5. Russia's stand-in EU ambassador reprimanded on Ukraine
  6. France warns over incoming eighth Covid wave
  7. EU adds Anguilla, Bahamas and Turks and Caicos to tax-haven blacklist
  8. Czechs warn joint-nationality citizens in Russia on mobilisation

Stakeholders' Highlights

  1. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  2. The European Association for Storage of EnergyRegister for the Energy Storage Global Conference, held in Brussels on 11-13 Oct.
  3. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  4. European Committee of the RegionsThe 20th edition of EURegionsWeek is ready to take off. Save your spot in Brussels.
  5. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  6. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”

Latest News

  1. EU wants to see US list on Russia financing of politicians
  2. Putin's twin aim: to break Ukraine and West's consensus
  3. Putin's diamond firm off the hook in EU sanctions
  4. The Iranian regime's expiration date
  5. Let's end Bulgaria and Romania's 11-year Schengen purgatory
  6. EU debates new pandemic-type loans to deal with crisis
  7. MEPs condemn EU Commission 'leniency' on Hungary
  8. Czech EU presidency wants asylum pledges to be secret

Stakeholders' Highlights

  1. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  2. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  3. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  4. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  5. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  6. Council of the EUEU: new rules on corporate sustainability reporting

Join EUobserver

Support quality EU news

Join us