The Commission
ruled in March 2004 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. It fined Microsoft €497.2 million and ordered it to
"untie" the Windows Media Player from the Windows operating system.
It was also required to assist competitors in making their products
interoperable with Windows.
Microsoft has always maintained that it acted lawfully.
In a statement released today, Microsoft said the two
fundamental questions in its appeal are whether companies can
improve their products by developing new features that consumers
want, and whether successful innovators must hand over their
valuable technology and intellectual property to competitors.
"These questions are critical to the success of individual
companies, and also to the economic vitality of any competitive
market," said Microsoft.
It points to growing competition in the online media player
market: the average number of media players used by consumers has
risen to 2.6 in 2006, up from 2.1 in 2004. Major PC manufacturers
also have increased the number of media players they pre-install on
computers sold in Europe – from an average of 1.4 media players in
2004 to 3.2 media players per computer in 2006. It also points out
that the rapid rise of Apple’s iTunes service and Macromedia’s
Flash media player "demonstrate the vigorous competition in the
media player market."
Regarding interoperability, Microsoft points out that most large
corporations in Europe operate IT systems composed of both
Microsoft and non-Microsoft products. "In fact, many major European
companies and public administrations provided evidence that
interoperability already exists between Windows server software and
competitor products, and has for many years," it said.
Microsoft concluded: "We recognise that we have a clear legal
duty to comply fully with the Commission’s 2004 Decision even while
the merits of the case are on appeal, and we will do our utmost to
fulfil this duty completely."
The final decision is expected to take several months.
