Microsoft Tests EU Sanctions in Public Court

Microsoft will fight to overturn a European commission's March ruling against it-and to delay remedies such as offering an unbundled Windows and opening protocols to rivals.

Microsofts hearing at the Court of First Instance in Luxembourg starting Thursday is perhaps the most critical stage of a European Union legal process that is likely to stretch on for years, according to legal analysts. But any real-world impact from the hearings is likely to still be months away, experts said.

The European Competition Commission fined Microsoft a record 497 million euros (about $613 million) in March for abusing its dominant market position in operating systems. The commission also ordered Microsoft to ship a version of Windows without bundled media players and to license protocols that would allow competitors to integrate their servers with Microsoft desktop systems.

/zimages/3/28571.gifRead more here about the European commissions ruling against Microsoft.

Microsoft has filed two challenges to the ruling: one seeking to overturn the March ruling, and another requesting a suspension of these remedies until the larger case has been settled.

Since the overall appeals process is likely to take several years, an immediate suspension would effectively remove any threat to Microsoft, according to legal experts.

"In practice, the outcome of this preliminary proceeding will have a major and perhaps decisive effect on the continuing commission proceedings against Microsoft," partner Christopher Norall and associate Jonathan Gowdy of international law firm Morrison and Foerster LLP wrote in an analysis.

The CFI (Court of First Instance), the EUs second-highest court, has been considering the suspension request since June, when Microsoft filed its appeal, and the process is set to culminate in two or three days of oral argument before CFI president Bo Vesterdorf. The CFI may choose to rebuke the European Competition Commission by suspending its measures, something that would not be unheard of, or it may uphold the commissions demands.

But either side can appeal the CFIs decision at the EUs highest court, the European Court of Justice (ECJ). If the ECJ also denies Microsofts appeal, Microsoft general counsel Brad Smith has said the company is prepared to carry out the measures prescribed by the competition commission.

It is also still possible that Microsoft and the commission could come to a settlement on terms different from those of the commissions decision, and Microsoft has said it will keep this option open. But part of the commissions motivation is to establish a legal framework for similar situations that might crop up in the future, according to analysts, and this wouldnt be possible through a settlement.

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