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Microsoft appeals EU antitrust ruling


Microsoft has filed an appeal against a European Commission ruling that the software giant breached European competition law, arguing that the terms of the ruling will undermine innovation and global economic growth.

The decision, issued in March after a five-year investigation, imposed a €497.2 million fine on Microsoft and obliged the company to "untie" the Windows Media Player from the Windows operating system.

An appeal was widely anticipated and confirmed yesterday by Horacio Gutierrez, Microsoft's leading European lawyer.

Details of the filing have not been released, but according to Gutierrez:

"The Commission's decision undermines the innovative efforts of successful companies, imposing significant new obligations on successful companies to license their proprietary technology to competitors, and restrict companies' ability to add innovative improvements to their products. The legal standards set by the Commission's decision significantly alter incentives for research and development that are important to global economic growth".

The ruling

The Commission's ruling found that Microsoft broke competition law by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players.

Because the illegal behaviour was still ongoing, the Commission ordered Microsoft to disclose to competitors, within 120 days, the interfaces required for their products to be able to "talk" with the ubiquitous Windows operating system.

Microsoft was also required, within 90 days, to offer a version of Windows without Windows Media Player to PC manufacturers (or when selling directly to end users). In addition, Microsoft was fined € 497 million for abusing its market power in the EU.

The appeal

Microsoft has now asked the European Court of First Instance in Luxembourg to annul the ruling, and in separate proceedings is expected to ask the Court to suspend the imposition of sanctions until after the appeal has been heard.

As any decision of the Court of First Instance can then be appealed to the European Court of Justice the whole process may take up to five years to fulfil. By this time, of course, the question of media players in the Windows operating system may well be moot.

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