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Microsoft loses EU appeal in anti-trust case

updated 09:00 am EDT, Mon September 17, 2007

MS Loses EU Appeal

The European Court of First Instance today rejected Microsoft's appeal against a 2004 European Commission ruling that declared the company in violation of European anti-trust regulations. The decision upheld all major points of the decision, which claimed that the American software developer had shut out competitors by simultaneously limiting access to source code for its server software as well as by bundling Windows Media Player. The Court of First Instance in particular said there was no "objective justification" for requiring Windows Media Player's inclusion with the Microsoft operating system and argued that competitors such as RealNetworks were unable to challenge Microsoft's relative dominance of digital media.

As a result of the move, the software firm has been asked to make significant reparations demanded by the original EC ruling, which included a 497 million Euro ($690 million) fine, compensation for the court costs of the Free Software Foundation and other groups who disputed Microsoft in the case, as well as key changes to its software. If maintained, the original findings would have Microsoft provide relevant source code to immediate competitors in the server space and would bar any future version of Windows from shipping only with Windows Media Player pre-installed. Since the original ruling, Microsoft has offered "N" versions of Windows XP and Windows Vista for Europeans that strip out the company's media software.

Microsoft has up to two months to launch one more appeal with the European Court of Justice but has yet to say whether it will pursue this route. Company general counsel Brad Smith said it was too early to offer a definitive response, but noted that it would comply with any final decisions and that the climate surrounding the anti-trust case had changed dramatically since the very beginnings of the case in 1998, referring to a recent deal with Sun Microsystems to use Windows Server software and its licensing of disputed patents with Linux distributor Novell.

"The world has changed, the industry has changed, and our company has changed," Smith said. "We sought to underscore that over a year ago when we published what we described as our Windows® Principles, principles intended to ensure that future versions of Windows, starting with Windows Vista, would comport not only with the principles of U.S. law but with the principles that are applicable here in Europe as well."

Regardless of the effect of the appeal's rejection, EC competition commissioner Neelie Kroes declared the ruling "bittersweet," warning that Microsoft's monopoly of the European market had persisted since 2004. However, the court action gives permission to the EC to challenge Microsoft in other anti-trust cases and sets a precedent for other firms suspected of abusing their control on the continent, such as Intel and Rambus.



By Electronista Staff
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Comments

  1. bhuot

    Fresh-Faced Recruit

    Joined: Nov 2003

    0

    slap on wrist

    Another slap on the wrist which does nothing. If Europe is serious about punishing Microsoft for its illegal behavior, the only thing that will be convincing would be to ban Microsoft products from Europe permanently.

  1. dawho9

    Senior User

    Joined: Mar 2001

    0

    Confused...

    The above write-up must be leaving out some important details because a quote like:

    "The Court of First Instance in particular said there was no "objective justification" for requiring Windows Media Player's inclusion with the Microsoft operating system"

    seems really odd. There is no reason to "bundle" a media player with an OS? Apple bundles QuickTime, are they in violation. My copy of SuSE Linux has a media player installed by default also.

    I would not put myself in the M$ loving camp but if you are going to ding them do it with a better explanation that just that.

    dw9

  1. robttwo

    Fresh-Faced Recruit

    Joined: Nov 2005

    0

    I dont like

    MS.

    However. The EU is a bunch of idiots. To force someone to include competitors products if they include their own...geesh.

    note: -------------------- Jonathan Zuck, president of Association for Competitive Technology, said the ruling could be seen as threatening to companies in other fields.

    "The decision on the Media Player opens a dangerous precedent for other companies and sectors," he said. "Airbus should start worrying about adding new features to its planes. This decision marks the start of a dark period for ICT companies — large or small — with a high degree of uncertainty around the protection of their intellectual property. The precedent will threaten the ability of any successful company to protect its innovations."

    ________________

    duffuses.

  1. imagine engine

    Fresh-Faced Recruit

    Joined: Aug 2007

    0

    No different than...

    Microsoft including their media player is no different than Apple including Quicktime with iTunes in OS X or Linux developers such as Novell, etc including a media player with a default installation. If a customer doesn't like Windows Media Player then simply install a different one. While I dislike Microsoft, as a consumer I wouldn't consider buying a computer these days if it didn't have a media player installed.

  1. RKDinOKC

    Fresh-Faced Recruit

    Joined: Jul 2007

    0

    It's not the bundle

    It is the lack of ability to replace the WMP with another media player.

  1. MiMiC

    Fresh-Faced Recruit

    Joined: Jun 2007

    0

    Agree

    This is absurd! Sure, like most here, I'm no M$ fan by a long shot, but right is right and this is wrong!

    To ban competitor products from distribution by vendors would be an act of monopolization, but to include your own software within your own software is by any intelligent person, SMART!

    I agree with keeping a level playing field to let competition drive the market, but rulings like this will only hamper development of new technologies.

    Once again, stupidity rules.

    Once again, M$ must be laughing as they are forced to SELL an add-on pack. For just $9.99 more, you get M$'s Media pack now with IE!

    Dumb, just dumb

    Richard

    RichGetz.com

  1. itguy05

    Forum Regular

    Joined: Apr 2005

    0

    It is the bundle

    You can't uninstall WMP or IE from your Windows installation. It's impossible. It's also illegal tying.

    You can completely remove Quicktime or Safari from your OS X installation.

    That's the issue here - while I don't think you should be forced to ship your competitor's products, I don't think you should force your additional wares on your clients either.

    If nothing else, the default should be to NOT install these apps and only install them if needed. Or make them easily removable.

  1. Terrin

    Fresh-Faced Recruit

    Joined: Jan 2006

    0

    Good

    What Microsoft did was illegal for two reasons. First, it has been found to be a monopoly (which by itself is not illegal) that has engaged in illegal anticompetitive behavior (e.g.g using that monopoly to gain an unfair advantage over others). Apple has never been found to be a monopoly so the comparisons to Microsoft are unfounded.

    Microsoft used its monopoly to force vendors like Dell to carry Windows Media even if they didn't want to. That would be OK if Microsoft wasn't a monopoly, but since it is, it cannot legally do that. If it were allowed to do that, companies like Apple couldn't compete with Microsoft by making programs like iTunes for Windows. Second, Microsoft didn't merely want to bundle Windows Media, it instead wanted to make it part of the operating system so that using it wasn't a choice at all. Apple has never forced anybody to use Quicktime. I in fact I prefer VLC.

  1. ViktorCode

    Fresh-Faced Recruit

    Joined: Jan 2006

    0

    Battlefield

    EU has become the legal battlefield for US companies. Microsoft case shows it clearly. And, unfortunately, it is likely that US companies choose to pursue their objectives there due to certain incompetence or lack of experience of European Comission.

    See for yourself: when Microsoft has been prosecuted in US for bundling IE with Windows, consumers got the easy way to choose default apps in the end. This case was started in the times of the browser war. When Microsoft has been prosecuted in EU. consumers got Windows N (which no one bought). This case was started at the times of.. well, when European Commision caught "me too" idea, after looking at US case.

    I understand many would like to uninstall IE and WMP from windows, but do you know you can do it right now with some easy hacking? The problem is many apps were created based on knowledge that IE and WMP are there, and this apps will cease to work properly.

    Personally I see no problem if I have bundled software which I don't use. It just sits there on a tiny fraction of HDD space, not getting in the way. Having an application never prevented me from trying a competitive product whenever I wanted it. One of these was RealPlayer which stayed on my system for 2 minutes. It was ridden with nag screens screaming "buy full version" on me. I don't know, maybe today RealPlayer is different, but if European Commision wants MS to bundle this c*** with Windows I cannot suppress a shudder.

  1. gskibum3

    Fresh-Faced Recruit

    Joined: Nov 2006

    0

    Forced?

    Nobody is forced to use Windows or buy a Dell.

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