EU court crushes Microsoft's antitrust appeal

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Brussels-luxembourg, Sept 17: European antitrust regulators won a historic victory over Microsoft on Monday when an 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.

''The Court of First Instance essentially upholds the Commission's decision finding that Microsoft abused its dominant position,'' a court statement said.

The Commission welcomed the long-awaited ruling in the 9-year-old 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.

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.

It ordered the company to sell a version of its ubiquitous Windows platform without the Windows Media Player application used for video and music, and to share key information allowing rivals' office servers to work smoothly with Windows.

No Objective Justification

Microsoft shares traded in Frankfurt were down 2 percent at 20.40 euros at 0815 GMT. About 13,000 shares had changed hands -- almost as much as the 30-day average daily trading volume in just over one hour of trading.

The European technology index <.SX8P> was down about 1 percent.

In a crucial finding backing the Commission's order that Microsoft change its business practices, the court said the company was unjustified in tying new applications to its Windows operating system in a way that harmed consumer choice.

''Microsoft has not demonstrated the existence of objective justification for the bundling, and ... the remedy imposed by the Commission is proportionate,'' the court statement said.

In a revealing detail, the judges ordered Microsoft to pay most of the costs including some of its business rivals' which had supported the Commission's case.

By contrast, Microsoft's allies were forced to bear their own costs.

A spokesman for the opponents, the European Committee for Interoperable Systems, said the ruling confirmed Microsoft had abused its near-monopoly in computer operating systems and set ground rules for the company's behaviour.

''This decision establishes principles for the behaviour of this company. Microsoft should now finally comply with the Commission decision on operability,'' lawyer Thomas Vinje said.

The ruling was made by the 13-judge Grand Chamber of the Court of First Instance in Luxembourg, the first time such a matter has been broadcast on live television.

The court upheld a record 497 million euro ($689.9 million) fine imposed on Microsoft as part of the original decision.

The Commission later fined Microsoft an additional 280.5 million euros, 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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