LONDON Microsoft suffered a major setback in Europe as the Luxembourg-based European Court of First Instance rejected almost all the substantive arguments in its its appeal to annul the antitrust decision made in 2004 by the European Commission.
The Commission found in that case that Microsoft abused its dominant position in the PC software market by failing to make its products compatible with those of rivals, and by bundling software products together with its core operating system software. It fined the company 497 million euros, ($613 million) , and a further 280.5 million Euros last July for failing to comply.
The decision of the Court Monday (Sept. 17) marks the culmination of a nine-year dispute between Microsoft and European regulators that could have a significant influence on EU competition law.
The Court of First Instance dismissed the appeal on all points except the EC ruling on the creation of a monitoring trustee to ensure implementation of one of the remedies. It ruled the the imposition of a trustee to oversee the company and check it was complying with court demands was an obligation too far.
The Commission has continued to publicly criticize and fine Microsoft, declaring that it has failed to properly comply with those terms, which include making software code for running server computers more available to competitors seeking to build compatible products.
The software giant is now likely to face even more intense scrutiny by the Commission, for instance over the way new functions other than Windows and MediaPlayer have been budled into its latest operating system, the Vista.
It is also facing potentially huge fines for failing to comply with the Commission's 2004 ruling.
Not surprisingly, Microsoft's rivals welcomed the top European Court ruling.
"This is a great day for European businesses and consumers. At long last, the decision opens the prospect for dynamic competition in the software industry. No more user lock-in, no more monopoly pricing," said Thomas Vinje, the lawyer representing Ecis, a group which includes IBM, Nokia, Oracle and Sun Microsystems.