Microsoft lost appeal to the European Courts over anti-competitive practices

The verdict is finally here. The appeal has been lost, all that Microsoft got out of it is the requirement to have an independent monitor to check it was keeping in line with the court’s rulings. The original verdict of the European Commission in 2004 was appealed to the European Court of First Instance. In the court’s statement about the appeal case, they said:

The Court of First Instance essentially upholds the Commission’s decision finding that Microsoft abused its dominant position…The Court criticises, in particular, the obligation imposed on Microsoft to allow the monitoring trustee, independently of the Commission, access to its information, documents, premises and employees and also to the source code of its relevant products.

Microsoft had previously been fined EUR497 million for anti-competitive practices in the way they write and sell their software. Specifically they were found to be less than forthcoming in giving away information on APIs in their operating system products (particularly Windows server), which prevented other software authors from writing code which would operate and interact with the OS as successfully as Microsoft’s own offerings.

They were also found guilty and for bundling applications which stifled competition since end-users would be less likely to download a third-party alternative even if were better, since in most cases they simply would not feel the need to. The hugely important bundled software in question? Media Player. Yawn. I have used other players for various reasons such as different formats (QuickTime, Real Player), improved control of audio ripping and better looks (WinAmp), and I know lots of people who use iTunes because – oh yes, it came bundled with some popular music device (I forget the iName of it). Can we really get all that excited about this? Apparently the lawyers can. Microsoft were obliged under the original ruling to produce and offer for sale a version of Windows which did not have Media Player built in.

When they failed to do everything the court had asked to their satisfaction they were penalised on a daily basis, which soon added up more than 50% on top of the original fine, although payment was deferred due to the ongoing case. A year ago Microsoft were claiming that the court’s failure to clarify some issues might delay the European launch of Vista. Although Vista was not specifically a subject of the ongoing case, it was obvious that some parallels between the features of XP and Vista might lead to an obvious extension of the previous ruling.

Microsoft now have about 60 days to appeal the decision, but this has to be on a point of law, rather than any of the detailed technical matters and grey areas of opinion which made the original case and this appeal too esoteric for many outside commentators.

Read the rulings on the various stages of the case against Microsoft at the CURIA website (Court of Justice of the European Communities)

So, is this a storm in a teacup?

Microsoft face huge fines and have to pay 80% of the court’s costs as well as their own. Perhaps some people won’t feel too much sympathy here and cynics would argue that this cost will simply be passed on to their customers anyway in order to protect the shareholders, as any decent publicly-traded company should.

The question is: who really gains from this apart from the lawyers? Will this really make a difference to Microsoft? Will we see a radical shift in the functionality and stability of third-party products? Will everyone stop using Media Player (and who really cares if they do)? Who will be next now that this precedent has been set?

Let me know what you think (and rate your apathy on a scale of “mildly interested” to “yeah, whatever”). Comment form below.


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2 Responses to Microsoft lost appeal to the European Courts over anti-competitive practices

  1. Adam Vero says:

    There’s some interesting comment about the legal details of the case and how this decision may affect future competition law matters on here:

  2. Pingback: GPMC will be removed if you install Vista Service Pack 1 (follow up post) « Getting IT Right

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