By Stevie Smith Sep 17, 2007, 15:47 GMT
Some three and a half years after Microsoft was first hit by the European Commission’s ruling that it had unfairly wielded the considerable power of its Windows operating system (OS) to push potential rivals out of the marketplace, the software giant has today lost its long and drawn-out appeal.
Specifically, the European Union’s Court of First Instance, which is located in Luxembourg and considered to be Europe’s second highest court, has stood behind the initial antitrust ruling placed before Microsoft back in March of 2004.
The dismissal of Microsoft’s appeal now enforces the original 2004 verdict which saw the Redmond-based software company slapped with a huge $670 million USD fine (plus a further $378 million USD non-compliance fine enforced in July of 2006) and a resultant order to produce its Windows OS packages with a view to more interoperability with the systems and software offered up by its rivals.
A related Time report offers that today’s decision is something of a crushing blow for Microsoft, which has been locked in battle with the EU Commission for almost a decade. It also says that the Commission’s position and reputation as an antitrust regulator would have been in jeopardy should the appeal have been ruled against it – not to mention the risk of a flood of similar appeal cases that could have followed soon after.
"This policy protects the European consumer interest and ensures fair competition between businesses," commented Commission President José Manuel Barroso. EU Competition Commissioner Neelie Kroes also outlined that Microsoft’s appeal loss exists as an "important precedent" to prove that dominant companies are not able to influence the placement of rivals who offer consumers potentially more through alternative, and often better value, market competition.
"This is a great day for European businesses and consumers," enthused Thomas Vinje, lawyer for the European Committee for Interoperable Systems (ECIS), a group of technology companies including the likes of IBM, Nokia, Oracle, and Sun Microsystems. "At long last, the decision opens the prospect for dynamic competition in the software industry. No more user lock-in, no more monopoly pricing."
Today’s ruling was based on two central points: Windows Media Player and server communication technology.
On the first point, the Commission ruled that the free bundling of Windows Media Player with Windows operating systems – installed on some 95 percent of all operating computers – granted Microsoft with a distinctly unfair market advantage and virtually nullified the potential of rival products such as Apple’s Quicktime and RealPlayer. On the second point, the Commission said that the lack of certain communications protocols on Windows also meant that office servers could not interact properly when using server operating systems produced by rival companies.
By way of reaction, Microsoft has said that the ruling will likely have a damaging effect on innovation, potentially crippling market-leading companies wishing to enhance their products but not able to directly benefit from those improvements. Unsurprisingly, Microsoft Corp is expected to appeal this latest decision.
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