http://www.washingtonpost.com/wp-dyn/content/article/2007/09/17/AR2007091700235_pf.html
European Court Upholds Microsoft Antitrust Fine By Molly Moore Washington Post Foreign Service Monday, September 17, 2007; 10:34 AM PARIS, Sept. 17 -- A European Union court Monday rejected Microsoft's appeal of a European antitrust order requiring it to share software information with rivals and pay a record $690 million in fines for quashing competition. Consumer advocates and Microsoft officials said the ruling by the European Court of First Instance would have far-reaching implications for high-technology companies and other industries around the world. European Competition Commissioner Neelie Kroes, who led the effort to force Microsoft to share technology rather than obligate consumers to buy only Microsoft software, said the decision "set an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high-tech industries." Microsoft senior vice president and general counsel Brad Smith called the court ruling disappointing, but added that the software giant is "committed to complying with every aspect" of the decision. The Luxembourg-based court wrote that it agreed with EU regulators who said Microsoft has "abused its dominant position" in the global software marketplace by stifling competition and undercutting innovation efforts by rivals, thus keeping prices excessively high. Although Smith said the U.S.-based company has not decided whether to appeal the court decision, he appeared far more resigned and conciliatory toward European regulators than in the past when Microsoft accused them of trying to curb innovation by forcing the company to give up its technology secrets. Smith said at a news conference in Brussels and carried on its Web site that the decision "very clearly gives the commission quite broad power and quite broad discretion." Although the EU commission's demands cannot be enforced outside Europe, Smith said the implications of the case will affect "our industry and every other industry in the world." The case centered on the commission's 2004 ruling that Microsoft used its near monopoly on the Windows operating system for desktop computers to compel consumers to buy its other software, such as Media Player, which allows users to access video and audio via the Internet. Commissioner Kroes said Microsoft's efforts "hurt consumers and dampened innovation." She added that "in a world where 95 percent of PCs run Windows," Microsoft's abuse of its dominant market position makes it difficult for computer users to share printers or documents unless they use Microsoft products. As a result, smaller companies found it virtually impossible to break into the market, she said. Microsoft's Smith said that since the 2004 decision, Microsoft has entered license-sharing agreements with other companies. He added, however, that based on Monday's ruling, the company needs to do more. The European case has been closely followed since it began in 1998, marking the efforts by regulators across the Atlantic there to more strictly control "dominant businesses." Though similar in some ways to the antitrust case pursued against Microsoft by the U.S. Justice Department, the policy also has put Europe at odds with other American companies and some computer trade groups that who argue that European regulators are infringing on intellectual property rights and stifling innovation. French officials, for example, have demanded that Apple Computer Corp. make the iPod's proprietary system more compatible with other music players, and German authorities have investigated some of Intel Corp.'s practices. Along with the original fine, Microsoft has been subject to hundreds of millions of dollars in other European levies for its failure to comply with the original ruling and provide the technical data other companies need to make their software work with Windows. But the case has also served as a reminder of Microsoft's enduring market position even in the face of antitrust challenges. The company's operating system remains by far the most widespread in offices and homes around the world, despite efforts by competitors like Linux and IBM to create alternative computer operating platforms. The company noted, for example, that it had been selling an alternative version of Windows without the Windows Media Player, as demanded by the European Commission, but few have been purchased. To advocates of the tough European stance, however, it is Microsoft that has stifled alternatives from emerging. 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