Court upholds Microsoft EU antitrust ruling

A European Union (EU) court has upheld most of the 2004 European Commission (EC) ruling that Microsoft abused its position of market dominance.

The ruling, delivered in Luxembourg this morning, finally quashes an appeal launched by Microsoft in an attempt to stave off its knock-on affects on the way it does business, as well as to avoid paying the €497 million (£343-million) fine - the highest ever single fine handed out by the EC - imposed on it at the time of the original judgement.

The following statement was issued: "The Court of First Instance essentially upholds the Commission's decision finding that Microsoft abused its dominant position."

But the Court did not go so far as to uphold the original judgement in its entirety. Most significantly, it has ruled the parts of the judgement that related to appointing a monitoring trustee should be annulled.

It did, however, uphold the main parts of the judgement: "The Court considers that the Commission was correct to conclude that the work group server operating systems of Microsoft's competitors must be able to interoperate with Windows domain architecture on an equal footing with Windows operating systems if they are to be capable of being marketed viably."

The original ruling against Microsoft came on 23 March 2004, when it was judged to have infringed Article 82 of the EC Treaty.

The EC accused the software giant of abusing its market dominant position because of its refusal to share information with work group server operating system market competitors between 1998 and the date of the ruling that would facilitate the development and distribution of rival products. The judgement forced it to share relevant communication protocol specifications with rivals.

The 2004 ruling also found that Microsoft had asserted unfair dominance in bundling its Windows Media Player with its Windows operating system, ruling that the company should offer a version of its PC software without it in future.

Microsoft launched its appeal against the ruling in June 2004, claiming in large part that the ruling would infringe its intellectual property rights by forcing it to share interoperability information.

Since then, and before the appeal was heard, the EC has threatened the company with even higher fines after protests from competitors that it had was not sharing sufficient code in the spirit of the interoperability ruling.

And the EC earlier this year warned of yet more fines for charging rivals too high a price for sharing code.

"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 in an article published by newswire Reuters.

The European Court of First Instance is the EU's second highest court, made up of a panel of 13 judges. However, even the ruling of this court is unlikely to be the end of the matter.

"There is likely to be an appeal to a higher court - the CFI is only the second-highest court in the EU. Also, there is the potential for a continued debate concerning Microsoft's compliance with the measures - with claims that the progress made to date by Microsoft to date in documenting and opening up its protocols already constitutes compliance, against a vague and unclear original request" said David Mitchell, senior vice president of IT Research at analyst firm Ovum.

"It has shipped a version of Windows without the Media Player but very few have bought it, to the extent that the 1,000 or so copies are probably owned by Microsoft employees who wanted the disc as a souvenir," he said. "And over the past four years it has produced some 14,000 pages of interoperability documentation as well as offering support services to those who want to develop products on top of Windows. But the quality of that documentation is probably as good as it's going to get given that the underlying product was a mess" he added.

Mitchell said the ruling would, however, make the ability for companies to diversify away from business models more difficult. He said: "There is the potential for this case to cause significant disruption in our industry, because the implication is, should a processor company be allowed to write software because it has an unfair advantage in writing software that can exploit chipset features over other software makers? Likewise, should infrastructure vendors be allowed to operate in the applications business? It opens up a whole set of potential questions, where a lot of vendors may ask, 'am I next?'"

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