Microsoft faces fresh antitrust probes
Sunday, 23 September 2007
Tobias Buck in Brussels
Microsoft faces the threat of fresh antitrust probes and escalating financial penalties after a top European Union court upheld Brussels' landmark 2004 competition ruling that found the world's biggest software group guilty of abusing its dominant market position.
The judgment by the European Court of First Instance handed a historic victory to the European Commission in its nine-year legal battle with Microsoft, and gives the regulator crucial backing to expand its investigation.
In the longer term, the court's decision to uphold the Commission's tough line against dominant companies may also pave the way for closer scrutiny of other technology giants such as Google, Apple and IBM.
Neelie Kroes, the EU competition commissioner, said: "The court has confirmed that Microsoft cannot regulate the market by imposing its products and services on people. The court has confirmed that Microsoft can no longer prevent the market from functioning properly and that computer users are therefore entitled to benefit from choice, more innovative products and more competitive prices."
She also warned Microsoft to comply swiftly with the Commission's original decision. Suggesting that new fines for the group's failure to implement the ruling may be imminent, Ms Kroes said: "I will not tolerate continued non-compliance."
Is the ruling good or bad news for consumers and businesses?
Microsoft conceded defeat, describing the ruling as "disappointing". Brad Smith, general counsel, said: "It is clearly very important to us that we comply with our obligations under European law. We will study this decision carefully, and if there are additional steps that we need to take, we will take them."
David Reichert, a Republican member of Congress from Washington, Microsoft's home state, said: "This ruling sets a dangerous precedent that says Europe is closed for business to those companies who invest the capital and resources necessary to lead a market."
Thomas Barnett, head of the antitrust division at the US justice department, said the Bush administration was "concerned" that the standard applied by the court might harm consumers by "chilling innovation and discouraging competition". Mr Barnett said: "In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors."
At the heart of the Commission's 2004 ruling was the finding that Microsoft had abused its dominant position in the market for desktop operating systems by freezing out rivals in adjacent markets such as media player and server software. The group was ordered to produce a version of Windows without Microsoft's own media player, and to make available technical information that would allow rivals to develop server software that functioned smoothly with Windows-driven computers. Brussels also imposed a record $690m fine.
The judgment upheld all the Commission's arguments relating to the main pillars of the 2004 ruling. But it did annul the part of the ruling that deals with the powers of the monitoring trustee - the independent expert responsible for reviewing Microsoft's compliance with the decision.
"At long last, the decision opens the prospect for dynamic competition in the software industry," said Thomas Vinje, the lawyer representing Ecis, a group including IBM, Nokia, Oracle and Sun Microsystems.
........................................
FT Syndication Service
Microsoft faces the threat of fresh antitrust probes and escalating financial penalties after a top European Union court upheld Brussels' landmark 2004 competition ruling that found the world's biggest software group guilty of abusing its dominant market position.
The judgment by the European Court of First Instance handed a historic victory to the European Commission in its nine-year legal battle with Microsoft, and gives the regulator crucial backing to expand its investigation.
In the longer term, the court's decision to uphold the Commission's tough line against dominant companies may also pave the way for closer scrutiny of other technology giants such as Google, Apple and IBM.
Neelie Kroes, the EU competition commissioner, said: "The court has confirmed that Microsoft cannot regulate the market by imposing its products and services on people. The court has confirmed that Microsoft can no longer prevent the market from functioning properly and that computer users are therefore entitled to benefit from choice, more innovative products and more competitive prices."
She also warned Microsoft to comply swiftly with the Commission's original decision. Suggesting that new fines for the group's failure to implement the ruling may be imminent, Ms Kroes said: "I will not tolerate continued non-compliance."
Is the ruling good or bad news for consumers and businesses?
Microsoft conceded defeat, describing the ruling as "disappointing". Brad Smith, general counsel, said: "It is clearly very important to us that we comply with our obligations under European law. We will study this decision carefully, and if there are additional steps that we need to take, we will take them."
David Reichert, a Republican member of Congress from Washington, Microsoft's home state, said: "This ruling sets a dangerous precedent that says Europe is closed for business to those companies who invest the capital and resources necessary to lead a market."
Thomas Barnett, head of the antitrust division at the US justice department, said the Bush administration was "concerned" that the standard applied by the court might harm consumers by "chilling innovation and discouraging competition". Mr Barnett said: "In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors."
At the heart of the Commission's 2004 ruling was the finding that Microsoft had abused its dominant position in the market for desktop operating systems by freezing out rivals in adjacent markets such as media player and server software. The group was ordered to produce a version of Windows without Microsoft's own media player, and to make available technical information that would allow rivals to develop server software that functioned smoothly with Windows-driven computers. Brussels also imposed a record $690m fine.
The judgment upheld all the Commission's arguments relating to the main pillars of the 2004 ruling. But it did annul the part of the ruling that deals with the powers of the monitoring trustee - the independent expert responsible for reviewing Microsoft's compliance with the decision.
"At long last, the decision opens the prospect for dynamic competition in the software industry," said Thomas Vinje, the lawyer representing Ecis, a group including IBM, Nokia, Oracle and Sun Microsystems.
........................................
FT Syndication Service