Microsoft Loses EU Antitrust Appeal

A monopoly is a monopoly is a monopoly

Microsoft Corp. lost its appeal of a European Union antitrust ruling, forcing the world's biggest software maker to pay a record 497 million-euro ($689 million) fine and help rivals connect their products to the Windows operating system.

The European Court of First Instance in Luxembourg today backed the EU's 2004 decision that ordered the U.S. company to disclose proprietary data and strip music and video software from a version of Windows. The judgment can be appealed to the European Court of Justice, the EU's highest court.

Microsoft, whose settlement with U.S. authorities is due to expire in November, has argued that the European Commission sought the illegal disclosure of trade secrets and a veto over features on software that runs on about 95 percent of the world's personal computers. The ruling bolsters probes by Competition Commissioner Neelie Kroes of Intel Corp., Rambus Inc. and Qualcomm Inc.

``This is deeply troubling for business, the state of the law and trans-Atlantic relations,'' said Philip Marsden, a competition lawyer and senior research fellow at the British Institute of International and Comparative Law. ``The ruling shows a total diversion between the U.S. and Europe.''

Shares of Redmond, Washington-based Microsoft fell 32 cents, or 1.1 percent, to $28.72 in Nasdaq Stock Market trading at 4 p.m. in New York.

Microsoft General Counsel Brad Smith said the company will study the decision carefully before deciding whether to appeal. He said at a press conference that the company is ``committed to complying with the antitrust decision.''

New Steps'

``We will take new steps to broaden our interoperability partnerships with others in our industry,'' he said. ``We look forward to taking those steps not in the months and years but in the weeks to come.''

The conclusions of today's ruling were read out by Bo Vesterdorf on his last day as the court's president. He was replaced by Marc Jaeger, a Luxembourg national.

``Microsoft has not shown that the commission erred in assessing the gravity and duration of the infringement or in setting the amount of the fine,'' the tribunal said in its 248- page judgment.

The bundling of Windows and the Media Player software ``allowed Microsoft to obtain an unparalleled advantage,'' the court said.

The court upheld one part of Microsoft's appeal. The judges said the commission was wrong to give an external expert access to the company's documents, premises and software source code.

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