Microsoft loses appeal to EU court over anti-trust remedies

By Steve Malone

Posted on 22 Dec 2004 at 10:49

The Luxembourg-based European Court of First Instance has ruled that Microsoft must abide by the decision this year of the EU Competition Commissioner. It must publish technical interoperability data allowing rival companies to create competing server products. Microsoft must also introduce a version of Windows into Europe without the disputed Windows Media Player.

Microsoft has already said that it will start shipping a Media Player-less version of Windows to OEMs from next month. Retail copies will appear on the shelves in February.

The court confirmed that the company had already paid a record 497 million Euros in fines.

Microsoft had asked the court to set aside the Commissions penalties while it heard the company's appeal. Critics feared that if the President of the Court Judge Bo Vesterdorf agreed, the appeal would be spun out over many years to the point where any future judgement would be meaningless.

However, Judge Vesterdorf ruled that while Microsoft was right to appeal to have the measures set aside for the duration of the appeal he concluded that 'Microsoft has not shown that it might suffer serious and irreparable damage as a result of implementation' of the Commissions remedies. He therefore dismissed Microsoft's requests both over the issue of opening up its code to competitors in the server market and tying together Windows and Windows Media Player. As a result, the remedies imposed by the Commission stand.

The result will be seen as a huge blow for Microsoft particularly over the issue of incorporating Media Player into its standard Windows offering.

At a time when downloading digital content, be it music or video is exploding and the issue of digital rights and copyright protection is such a hotly debated topic, the ruling will drive a wedge into Microsoft's plans to created the de facto standard for digital rights management on the PC and from there to a wide range of portable devices: a market set to be worth billions of pounds over the coming years.

Microsoft will be somewhat more sanguine over providing interoperability data to its competitors. Since the Commission ruling it has signed a truce with two of its major competitors Sun and Novell as well as the Computer & Communications Industry Association (CCIA).