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EU Court Defeats Microsoft in Antitrust Case

Microsoft Corp. is contemplating whether to appeal a European court's ruling Monday that the giant software maker has been violating antitrust laws.

Executives at the Redmond, Wash.-based company had not had a chance to sift the 248-page ruling.

"I don't want to talk about what will come next," said Brad Smith, the company's general counsel. "We need to read the ruling before we make any decision."


The ruling confirms a European Commission judgment in 2004 that Microsoft impeded competition by including Media Player in all its Windows operating systems, fining the company more than $613 million.

The order by the European Union Court of First Instance also forces the technology giant to share communications code with rivals and sell a copy of Windows without Media Player.

Smith said the company, though disappointed, will comply with the ruling – expressing relief that the court did no order the company to stop selling the version of the Windows complete Media Player.

The company will have to offer an alternative.

"It does provide us with some clarity," Smith said. "I hope we can start to build a new relationship with the European Commission."


Microsoft has two months to appeal to the European Court of Justice, the EU's highest court.

The European Union Court of First Instance confirms regulators had "quite broad power and quite broad discretion" over companies with large market shares, Smith said, referring to Google Inc., Apple Inc. and International Business Machines Corp. as those that needed to heed the decision.

It said regulators had clearly demonstrated that selling media software with Windows had damaged rivals.

"The court observes that it is beyond dispute that in consequence of the tying consumers are unable to acquire the Windows operating system without simultaneously acquiring Windows Media Player," it said.

"In that regard, the court considers that neither the fact that Microsoft does not charge a separate price for Windows Media Player nor the fact that consumers are not obliged to use that Media Player is irrelevant."

But the court did overturn regulators' decision to appoint a monitoring trustee to watch how Microsoft had complied with the ruling, saying the Commission had exceeded its powers by ordering Microsoft to pay for all the costs of the trustee.

The mood at EU headquarters was one of elation and the court's decision was hailed as a big victory for the EU's competition policy and for consumer rights.

"The ruling confirms more than ever that Microsoft must comply," said EU Competition Commissioner Neelie Kroes. "I will not tolerate continued noncompliance."

Kroes said however that the victory did not yet mean that software customers have more choice than they did three years ago, when Microsoft was slapped with the original EU fine.

"The court has confirmed the Commission's view that consumers are suffering at the hands of Microsoft," she said.

She refused to say what the implications of Monday's decision would have on other ongoing legal fights between the EU and Microsoft.

From NPR reports and The Associated Press

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