EU denies Microsoft's antitrust appeal
Europe's Court of First Instance rejected Microsoft's request to nullify sanctions issued in 2004 by the European Commission. Microsoft has paid a record $613 million fine and been forced to adjust the way it sells its Windows operating system in Europe.
Tech industry analysts said the Monday ruling could trigger a rise in enforcement of antitrust rules in Europe, possibly even the United States.
"The EU is likely to hound Microsoft for years," says Bill Whyman, head of tech research at International Strategy & Investment Group. "An emboldened EU, confident of its legal authority, combined with a potential Democrat-led U.S. Justice Department after 2008, could bring a sea change in antitrust risk."
European antitrust commissioner Neelie Kroes said the ruling "sends a clear signal that super-dominant companies cannot abuse their position to hurt consumers and dampen innovation." Kroes called for "a significant drop" in Windows' market share.
"Now technology companies will have a much better chance to compete on the merits," said Thomas Vinje, a spokesman for the European Committee for Interoperable Systems, a consortium of Microsoft's rivals.
Microsoft has two months to make a final appeal to Europe's highest court. It has been seeking a rescission of requirements that it supply a version of Windows without the media player bundled in, and that it make it easier for programs supplied by rivals to run on its Windows server software.
Microsoft settled a U.S. antitrust case in 2001 by changing how it bundles Internet Explorer in Windows.
Microsoft's general counsel, Brad Smith, said the ruling "is not what we would have hoped for. To say anything less would be less than candid."
Smith added that the ruling "does provide us some new clarity, and on that clarity I hope we can start to build a new and stronger relationship with the European Commission."
Microsoft recently has begun to question how its strategy of bundling new features in Windows differs from Nokia's move to bundle cameras in cell phones or Apple's drive into the cell phone business, says James Governor, tech industry analyst at RedMonk.
Microsoft would do well to forget another appeal and try to work with Kroes to define acceptable parameters under which tech companies can add new features to their products, Governor says.
"Why is it that you can (acquire) your way into different markets, but you cannot bundle your way into different markets?" says Governor.
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