LUXEMBOURG/VARIOUS: European Court of Justice crushes Microsoft's antitrust appeal

Record ID: 451964

  • Title: LUXEMBOURG/VARIOUS: European Court of Justice crushes Microsoft's antitrust appeal
  • Date: 17th September 2007
  • Summary: (BN09)BRUSSELS, BELGIUM (FILE - NOVEMBER 2006) (REUTERS) MICROSOFT CHAIRMAN BILL GATES AT INNOVATION EVENT WITH FINNISH PRIME MINISTER MATTI VANHANEN TESTING THE NEW DEVICE WHICH ENABLES COMPUTER USERS TO MOVE DATA WITH THEIR HANDS
  • Embargoed: 2nd October 2007 13:00
  • Keywords:
  • Topics: Legal System,European Union
  • Reuters ID: LVA2SLWZAO3KP8EWZX8KEBH8N18W
  • Story Text: An EU court backs the European Commission's ruling that software giant Microsoft illegally used its power to crush competitors. The court also upholds a record 497 million euro (690 million U.S. dollar) fine imposed on Microsoft.
    European antitrust regulators won a historic victory over Microsoft on Monday (September 17) when an European Union (EU) court upheld the European Commission's 2004 ruling that the U.S. software giant abused its market dominance.
    The European Union's second-highest court dismissed Microsoft's appeal on all substantive points, but threw the company a small bone by reversing the Commission on the creation and funding of a monitoring trustee to ensure implementation of one of the remedies.
    Thomas Vinje, a lawyer for the European Committee for interoperable systems, said: "This decision establishes principles for the behaviour of this company which it will have to abide by in a broad variety of contexts and with respect to a broad variety of products."
    Microsoft's general counsel Brad Smith said Microsoft would endeavour to comply with its obligations under European law.
    The European Commission welcomed the long-awaited ruling in the nine year case with undisguised relief. Officials had said a defeat for Brussels would have emasculated its ability to regulate hi-tech industries.
    Instead, the verdict, which can be appealed to the European Court of Justice only on points of law and not of fact, opens the way for Competition Commissioner Neelie Kroes to take additional action against Microsoft.
    Speaking in Brussels, Kroes said the ruling had one message: dominant companies must allow for fair competition, especially within high-tech industries.
    "Most importantly it sends a clear signal that super dominant companies cannot abuse their positions to hurt consumers and dampen innovation by excluding competitors in related markets," Kroes said.
    Kroes also said Brussels would act if necessary and show zero tolerance against non compliance. "I will not tolerate continued non compliance," Kroes said.
    The EU executive, which has wide-ranging antitrust and merger control powers, found in 2004 that Microsoft had used its 95 percent share of the market in personal computer operating systems to elbow aside and damage smaller rivals.
    Michael Reynolds partner in Allen and Overy law firm, and head of its antitrust department, said the significance of the ruling is that it completely upholds the Commission's decision adopted in 2004.
    In rejecting every argument that Microsoft brought against the Commission's decision it reaffirms European law and upholds "principles laid down in the decision applied to Microsoft," Reynolds said.
    Reynolds said those principles "will apply for other companies throughout the sector which also have important market positions."
    The court upheld a record 497 million euro (689.9 million U.S. dollar) fine imposed on Microsoft as part of the original decision.
    The Commission later fined Microsoft an additional 280.5 million euros (389 million U.S. dollars), saying it had failed to comply with its decision on interoperability.
    The EU regulator is considering a further fine for non-compliance.
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