It’s been announced today that Microsoft has lost its appeal against a record 497 million euro (£343 million; $690 million) fine imposed by the European Commission in a long-running competition dispute. Below is a section from the Court of First Instance Press Release:

Judgment of the Court of First Instance in Case T-201/04

Microsoft Corp. v Commission of the European Communities

THE COURT OF FIRST INSTANCE ESSENTIALLY UPHOLDS THE COMMISSION’S DECISION FINDING THAT MICROSOFT ABUSED ITS DOMINANT POSITION

However, the Court has annulled certain parts of the decision relating to the appointment of a monitoring trustee, which have no legal basis in Community law

On 23 March 2004 the European Commission adopted a decision finding that Microsoft had infringed Article 82 of the EC Treaty by abusing its dominant position by engaging in two separate types of conduct. The Commission also imposed a fine of more than EUR 497 million on Microsoft.

The first type of conduct found to constitute an abuse consisted in Microsoft’s refusal to supply its competitors with ‘interoperability information’ and to authorise them to use that information to develop and distribute products competing with its own products on the work group server operating system market, between October 1998 and the date of adoption of the decision. By way of remedy, the Commission required Microsoft to disclose the ‘specifications’ of its client/server and server/server communication protocols to any undertaking wishing to develop and distribute work group server operating systems.

The second type of conduct to which the Commission took exception was the tying of Windows Media Player with the Windows PC operating system. The Commission considered that that practice affected competition on the media player market. By way of remedy, the Commission required Microsoft to offer for sale a version of Windows without Windows Media Player.

Brad Smith, Senior Vice President on the General Counsel for Microsoft has said “It’s clearly very important to us as a company that we comply with our obligations under European law. We’ll study this decision carefully, and if there are additional steps that we need to take in order to comply with it, we will take them.”

Court Ruling

• Court of First Instance Press Release: Judgment of the Court of First Instance in Case T-201/04 (.pdf file, 113 kb, , Sept. 17, 2007)
• Judgment of the Court of First Instance (Grand Chamber) (.pdf file, 1 mb, Sept. 17, 2007)
• Europe by Satellite: Webcast of the CFI Court Decision (registration required)