EU Court Strikes Down

By Peter Galli  |  Posted 2007-09-17 Print this article Print

Microsoft Appeal of Antitrust Ruling"> The European Court of First Instance upheld on Sept. 17 the findings of the European Commission that Microsoft abused its dominant position by refusing to make its products interoperable with those of its rivals and by tying Windows Media Player to the Windows operating system. The court also upheld the $613 million fine imposed on Redmond, Wash., software maker.
This latest judgment follows the ruling by the European Union in March 2004 that Microsoft had abused its dominant market position with Windows, and the company was ordered to offer to manufacturers a version of Windows without Windows Media Player. It was also slapped with the fine.
The EU ruling that Microsoft used its "near monopoly" in the desktop operating system market to create an illegal advantage in related software markets followed a five-year investigation. By playing on the interoperability of Windows and its servers, Microsoft was able to override other factors of server performance offered by rivals, the commission found. Microsoft is required to disclose interface information that allows other servers to comparably interoperate with Microsoft products, the commission ruled. Click here to read more about Microsofts record fine. The order also prohibited Microsoft from using "any commercial, technological or contractual terms" that would make the unbundled version of Windows less attractive. "In particular, [Microsoft] must not give PC manufacturers a discount conditional on their buying Windows together with [Windows Media Player]," the commission said. Microsoft General Counsel Brad Smith said in a statement early Sept. 17 that he and other company officials need more time to study the ruling before determining the next steps but did say that Microsoft is determined to comply with European laws. "[T]heres obviously a lot of work that has gone into our efforts to comply with the commissions terms with respect to communications protocols and our duty to license them, a duty that obviously was reaffirmed by the courts decision today," Smith said. "Weve made a lot of progress in that regard, and yet we all have to acknowledge that there are some issues that do remain open." Microsoft appealed the March 2004 judgment in June of that same year, claiming the decision does not "serve the interests of consumers." But in June 2005, the company released Windows XP N, its Media Player-free version of Windows. In its decision, the European Court of First Instance said the commission was "correct to conclude that the work group server operating systems of Microsofts 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 Microsofts competitive position on the market and creates a risk that competition will be eliminated," the court said in its ruling, which can be found here in PDF form. Six states want Microsofts U.S. antitrust consent decree extended by five years. Click here to read more. The court also upheld the commissions decision to force Microsoft to offer a version of Windows without its media player installed but noted that Microsoft retains the right to continue to offer the version bundled with Windows Media Player as well. "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 commissions 2004 decision, and Im also gratified that we were able to have the kinds of constructive discussions with the European Commission last year that enabled us to bring to market Windows Vista in conformity with the commissions 2004 decision." Page 2: EU Court Strikes Down Microsoft Appeal of Antitrust Ruling

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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