Microsoft Must Follow EU Remedies
Microsoft lost its bid to avoid remedies ordered by the European Union while it awaits appeal of its antitrust case. In a decision Wed., the EU Court of First Instance rejected the software maker’s claim that unbundling its media player from the Windows operating system and providing workgroup server code to competitors would cause the company long-term harm. The European court found Microsoft guilty March 24 of breaking antitrust laws.
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“Microsoft has not demonstrated specifically that it might suffer serious and irreparable damage owing to an interference with its business policy or to injury to its reputation,” said Bo Vesterdorf, pres. of the Court of First Instance. “Microsoft’s application for interim measures is therefore dismissed in its entirety.”
Microsoft must now offer a version of its Windows operating system sans media player to EU consumers and provide server operating system code to competitors in the European market. “We continue to believe that the Commission’s remedies will bring very few benefits to competitors and consumers in Europe, and will in fact harm many users of the Windows operating system,” Microsoft said in a statement.
The company will post a server code Web page for interested licensees, said Microsoft Gen. Counsel Brad Smith, and will start shipping the stripped down version of the Windows operating system to PC manufacturers in Jan. The altered version will sell for full price. “We're skeptical consumers will be interested in this product,” Smith said.
Antitrust advocates hailed the decision. “Consumers awoke this morning to find a gift under their Christmas trees from the European Union’s Court of First Instance,” said Robert Lande, a senior fellow at the American Antitrust Institute. “Genuine competition is possible now” in the media player market.
Microsoft supporters blasted the decision: “It will have dangerous repercussions for small software developers, consumers and the future of innovation,” predicted Jonathan Zuck, pres. of the Assn. for Competitive Technology. “While intended to constrain Microsoft, the Commission’s sanctions will impose billions of dollars in new costs on small software developers and consumers, and threaten the future of innovation.”
Microsoft said it remains optimistic it will ultimately win the case on its merits. “While we had hoped that the Court would suspend some or all of the remedies in the case, we are encouraged that the Court has recognized that Microsoft has a number of powerful arguments that must be considered in the full appeal,” it said.
Smith implied the company is still willing to negotiate a settlement with the EU: “We believe the best path forward is based on sitting around a table for face to face direct discussions.” Without a settlement, the case could last at least another 2 years, Smith said. The EU fined the company $613 million last spring, all of which must be paid.