Microsoft Files Appeal Against EU Decision

Microsoft files its appeal of the European Union's landmark antitrust decision, charging the changes in business practices demanded by EU regulators would undermine innovation and growth.

LONDON—Microsoft Corp. has filed its appeal against the European Commissions judgment in its long-running antitrust battle, claiming the decision does not "serve the interests of consumers."

The companys appeal, which has been filed with the European Court of First Instance, asks that the judgment in its case be rescinded. This includes both a record fine of $611 million (€497 million) and an order requiring it to produce a version of Windows without Windows Media Player bundled.

"The Commissions decision undermines the innovative efforts of successful companies ... [and] the legal standards ... significantly alter incentives for research and development that are important to global economic growth," said Horacio Gutierrez, Microsofts associate general council for Europe.

/zimages/3/28571.gifWhy did the EU sock it to Microsoft? Find out here.

However, Mario Monti, the European Unions competition commissioner, expressed his confidence in the judgments chances of standing on appeal. "We believe we have a strong case to bring to court," he said, adding, "We feel pretty confident about the decision and look forward with confidence to the appeal."

Bo Vesterdorf, president of the Court of First Instance, is expected to rule within a week on whether to issue a stay against the fine and sanctions, or if they should be implemented before an appeal. The court process itself may not be completed until as late as 2009, leading some commentators to suggest that the EC would have been better off settling with Microsoft than attempting to force its hand through the courts.

And the final decision of the court may be influenced by the settlement between Sun Microsystems Inc. and Microsoft, announced in April, which saw the two companies share access to each others server technology—a key issue in the ECs antitrust case.

However, the EU is likely to come under pressure from the U.S. government to settle the case as quickly as possible. Although the U.S. Department of Justice declined to comment on the appeal, senior figures in the department have previously been critical of the judgment.

In March, R. Hewitt Pate, assistant attorney general for antitrust, described the judgment as "unfortunate."

"Sound antitrust policy must avoid chilling innovation and competition even by dominant companies," he said. "[The ECs] approach risks protecting competitors, not competition, in ways that may ultimately harm innovation and the consumers that benefit from it."

The ECs investigation into Microsoft took five years to complete, and concluded in March when it ordered the company to pay a fine of $611 million and produce a version of Windows without Windows Media Player. The EC also ordered the company to work with rival server vendors to ensure their products could work as well with Windows as Microsofts own.

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