With Microsoft ruling, a precedent for IT in Europe
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(InfoWorld) - Microsoft suffered a humiliating legal defeat Monday when it lost a court appealÂ to overturn the European Commission's 2004 antitrust ruling against it. The decision took most observers by surprise. The Court of First Instance, Europe's second highest court based in Luxembourg, sided squarely with Europe's top antitrust regulator on the two central issues in the case. Most commentators expected a mixed verdict. While the details of the lengthy court decision are still being examined in their minutiae, some consequences are already clear: The ruling pulls a legal rug from under Microsoft's strategy of bundling software onto its Windows operating system, providing a powerful legal reference point for any future antitrust litigation against the company, and it strengthens the Commission's authority, especially when dealing with antitrust abuse in the fast-moving information technology industry. The Commission was right to rule against Microsoft's strategy of bundling its Media Player application into the Windows operating system, the court concluded, after three years deliberation. Similarly, Microsoft acted illegally by refusing to share the required interoperability information needed by rivals to build server operating systems that work smoothly with Windows, the court said. Microsoft's most senior lawyer, Brad Smith said the court decision was "disappointing." He hasn't decided whether to appeal it to the top court, the Court of Justice. If Microsoft does this, it can only dispute points of law, not facts established in Monday's ruling. Smith said Monday's court ruling has important implications for Microsoft's strategy of bundling together a range of applications with the Windows operating system. This strategy has proved effective in the past. Microsoft eclipsed Netscape in the mid 1990s when it bundled in its Internet Explorer application into the operating system. And RealPlayer dominated the market for streaming media applications until Microsoft started bundling its Media Player into Windows in 1999. The Commission initially hoped to save RealPlayer from Netscape's fate by ordering Microsoft in 2004 to sell a second unbundled version of Windows, but it was too late. The market had tipped irreversibly in favor of Microsoft even before the 2004 ruling. The Commission's remedy to restore competition to the streaming media software market in 2004 was to order Microsoft to sell a second version, later dubbed Windows N, with Media Player stripped out. But the remedy has had no impact on the market. Nevertheless, winning the bundling argument in court was the most important victory of the day for the Commission, and for other companies that believe they suffered from Microsoft's unfair bundling strategy, according to Commission officials and lawyers following the case. "This is an important precedent, not just for this particular product on this particular market," said Competition commissioner Neelie Kroes at a press conference Monday. There isn't a queue of complainants lined up, she said, but she added that "they are welcome." Thomas Vinje, legal counsel for the European Committee for Interoperable Systems, (ECIS) a Commission ally in the case, said the Commission's authority to regulate competition in the IT industry has been strengthened by the court ruling. "It has strengthened their hand," he said, adding that he will encourage the Commission to move swiftly ahead with the antitrust complaint ECIS filed to the European regulator two years ago. However, he dismissed claims made during the day that the ruling would be a threat for all successful companies. "The Microsoft case is very rare in that it concerns a super-dominant company," he said. "The Commission may be emboldened by the endorsement of the court to take action against other companies in the IT industry -- There may be issues to be addressed concerningÂ Google's dominance of search, or with its plans to take over DoubleClick, but they bear little resemblance to the specific issues in the Microsoft case. The only real implications from the Microsoft case are for Microsoft itself," he added.
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A European Union court ruled Wednesday that Microsoft will have to abide immediately by an EU ruling that forces the software giant to change its commercial practices before the appeals procedure runs its full course. -AP
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BERLIN While competitors hailed a European judge&#39;s decision to force Microsoft to sell a stripped-down version of its Windows computer operating software without a media player, analysts said European consumers may be less than pleased.
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A European Union court will rule Sept. 17 on Microsoft's challenge to an order that that imposed hundreds of millions of dollars of fines on the world's biggest software company for what the regulators said was anti-competitive activity, the court said Tuesday.
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Microsoft begins a challenge to overturn a European Commission ruling that hit it with a 497m euro fine and an order to share its software systems with rivals.
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Wednesday&#39;s ruling will be on whether the European Union penalties assessed against Microsoft -- including the largest antitrust fine ever levied by the European Commission and the requirement
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The European Commission is due to fine  Microsoft on Wednesday as part of a hard-line approach toward  getting the software giant to comply with antitrust sanctions  that appears to be bearing fruit.
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Last week's ruling by the European Court of First Instance (CFI) upholding the European Commission's 2004 finding against Microsoft and its subsequent Statement of Objections, may open the door for the EC to take unprecedented action. Commissioner for Competition Neelie Kroes stated she's open to suggestion, and today one response came from the respected Brussels-based Globalisation Institute think tank: Force manufacturers by law to sell PCs without operating systems pre-installed or bundled.
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A European court begins delivering its verdict in the long-running competition dispute with Microsoft.
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Microsoft has lost on all key points in its competition dispute with the European Commission - but what is the impact of the ruling?
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A European Union court will decide on  Monday whether Microsoft abused its near-monopoly position on  the world&#39;s 1 billion computers and servers to push smaller  competitors out of the marketplace.
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Changes Microsoft will make to its business practices to comply with the 2004 European Commission antitrust ruling will &quot;profoundly affect the software industry,&quot; European competition commissioner Neelie Kroes said Monday.For three and a half years Microsoft dragged its feet and used every legal avenue available to delay complying with the&#160;2004 antitrust ruling. But after its&#160;appeal of the ruling to Europe&#39;s second highest court failed&#160;last month, the company decided to cooperate.&quot;At the time the Court of First Instance issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the Commission&#39;s decision. We have undertaken a constructive discussion with the Commission and have now&#160;agreed on those additional steps,&quot; Microsoft said in a statement Monday.Open-source software developers will be given access to the interoperability protocols inside Windows that Microsoft was ordered to reveal. Until recently the software giant had steadfastly refused to allow that. The protocols will be available for a fraction of the license fee Microsoft intended to charge and they will be valid worldwide, the Commission said Monday.These concessions were agreed to between Microsoft CEO Steve Ballmer and Kroes in a recent meeting at a restaurant near Kroes&#39; home town of Rotterdam in the Netherlands. The final details were agreed to in a transatlantic phone call Monday morning Brussels time, Sunday evening in Redmond, Washington, from where Ballmer made the call.Kroes was visibly delighted at Microsoft&#39;s decision to respect the Commission&#39;s authority. &quot;I hope we can close this dark chapter in our relationship,&quot; she told journalists at a news conference at the Commission&#39;s headquarters in Brussels.However, she also made clear that while Microsoft&#39;s latest efforts substantially respect its obligations under the 2004 ruling, other points of conflict could occur.&quot;New issues may arise,&quot; she warned, pointing to &quot;a couple of other cases on our desks&quot; concerning the company.One of those cases was sparked by a complaint from the trade group ECIS (European Committee for Interoperable Systems), whose members include IBM, Oracle, and Red Hat. The Commission declined to comment on other cases.Besides complying with the 2004 ruling, Microsoft also said Monday that it wouldn&#39;t appeal last month&#39;s defeat at the Court of First Instance, ending the legal uncertainty that continued to face software and hardware developers long after the 2004 ruling.While doubts remained about the validity of the Commission&#39;s 2004 antitrust ruling, the computer industry was unable to plan future product development with full confidence. Now they know, for example, that open-source software developers will be able to compete for a share of the market for workgroup server operating systems -- the computers that run networks of PCs.Microsoft has a 95 percent market share on the desktop operating system market and over 70 percent of the market for workgroup server operating systems. Open-source workgroup server products are virtually the only alternative for users and are thus the main surviving competitive constraint on Microsoft, the Commission said.&quot;More competition on this market should offer consumers more innovative products, with improved functionality at better prices. For that reason, it is vital to the effectiveness of the 2004 decision that Microsoft also complies by giving access to open-source developers access to the interoperability information,&quot; the Commission said.While failing up to now to provide all the information demanded by the Commission, Microsoft has been providing two separate licensing arrangements to companies. The first is a &quot;No Patent Agreement&quot; allowing licensees access to the interoperability information, but without taking a license for patents that Microsoft claims is necessary, a contention disputed by some third parties.Microsoft Monday confirmed it has made three changes to this license. Besides granting access to it to open-source developers, it has reduced royalty fees to a single flat rate payment of &#8364;10,000 ($14,308, based on Monday&#39;s exchange rate). It has also agreed to allow licensees to dispute the accuracy or completeness of the interoperability information and seek damages in private enforcement claims at the High Court in London.Kroes said the London court is the best qualified court in Europe to handle such disputes.The second type of license offered by Microsoft includes rights to use patent-protected interoperability information. Microsoft was demanding payment for the patent-protected information amounting to 5.95 percent of the licensee&#39;s revenues from the product that benefited from the information. Microsoft agreed Monday to slash this to 0.4 percent of revenue, the Commission said.Of the 154 protocols being licensed, only 31 are patent-protected. Licensees are free to choose if they need to take out a patent license or if they can work around the patents, Kroes said.While Monday&#39;s agreement between the Commission and Microsoft draws a line through most of the outstanding legal issues they have fought over for the past nine years, the Commission still hasn&#39;t decided how much to fine the company for failing to comply up to now.Two years ago the regulator fined Microsoft &#8364;280.5 million for failing to provide adequate interoperability information, and imposed further daily fines. The additional fines will add up to tens, possibly hundreds, of millions of euros in additional fines. The Commission will announce the full tally of fines before the end of this year, spokesman Jonathan Todd said.Another outstanding question is whether Microsoft will withdraw an appeal of the ruling that imposed the noncompliance fine. That appeal was lodged with the Court of First Instance in 2005. Microsoft spokesman Tom Brookes said he was unaware of any decision to withdraw the appeal.In 2004 the Commission, Europe&#39;s top antitrust regulator, fined Microsoft &#8364;497 million for abusing the dominant power of its Windows operating system. It ordered the company to reveal secret protocols inside Windows to rival makers of workgroup server operating systems to allow them to build systems that worked properly with PCs running Windows.It also ordered the company to offer consumers a second version of Windows that has the media player stripped out, because the Commission concluded that by bundling Microsoft&#39;s own audio and video playing program into the operating system, it was putting rival media players at an unfair disadvantage.
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Microsoft Corp. (MSFT.O: Quote, Profile, Research) was ordered by a European Union court to change its business practices and immediately
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Microsoft agrees to comply with the European Commission's anti-monopoly ruling against it.
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Secret meeting last month The European Court of First Instance could deliver its verdict on Microsoft's appeal of its anti-trust ruling before the summer recess.â¦
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Microsoft has agreed to comply with the European Commission's 2004 anti-monopoly ruling against it, Brussels says.
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A European Union court will decide on Monday whether Microsoft abused its near-monopoly position on the world's 1 billion computers and servers to push smaller competitors out of the marketplace.