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June 28, 2012

European Court rejects Microsoft’s appeal against antitrust fine

Penalty earlier imposed on the ground that the remuneration rates proposed by Microsoft for granting access to the interoperability information were unreasonable

By CBR Staff Writer

A court in the European Union (EU) has rejected a plea by Microsoft to dismiss a penalty imposed by the EU in 2008 for failing to comply with an order to share product information with competitors.

The General Court, the second-highest court of the European Union, reduced the fine amount by €39m ($48.7m) to €860m ($1.07bn) after finding that the assessment was miscalculated by the regulators.

The European Comission said in a statement that court’s ruling vindicates the Commission’s efforts to ensure full compliance with its antitrust decisions, in particular the 2004 decision.

"As a result of the Commission’s enforcement action, a range of innovative products have come to market that would otherwise not have seen the light of day, " the commission added.

In 2004 the Commission found that Microsoft had abused its dominant position in PC operating systems by hiding critical interoperability information from its competitors.

The commision added that upholding of this information meant that providers of rival work group server operating systems were unable to compete effectively even though they were rated more highly by users than Microsoft’s products on a range of parameters such as reliability, security and speed.

The penalty was imposed after the company failed to comply with a 2004 ruling to divulge certain information its competitors requested on some of the interfaces to Windows NT, a family of operating systems produced by Microsoft, the first version of which was released in July 1993.

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The court ruring said, "Microsoft had failed to provide a complete and accurate version of the interoperability information within the period set by the 2004 decision and the remuneration rates sought by Microsoft for granting access to the information were unreasonable."

Considering the two earlier fines for this case, Microsoft has to pay a total penalty of €1.64bn.

This is a massive fine for a single antitrust case in Europe, after Intel was imposed with the largest single fine of €1.1bn in 2009 by the European antitrust authorities, which it fought against.

Microsoft, disappointed with the court’s ruling, has not revealed whether it would appeal to EU Court of Justice, Europe’s top court.

The case brought against Microsoft for abuse of its dominant position in the market originally started as a complaint from Novell over Microsoft’s licensing practices in 1993 which eventually resulted in the EU ordering Microsoft to divulge information about its server products and release a version of Microsoft Windows without Windows Media Player.

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