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Microsoft Asks European Court to Junk Antitrust Ruling

Posted on: Wednesday, 9 June 2004, 06:00 CDT

Jun. 9--Microsoft filed an appeal Monday asking a court to strike down a March ruling by European antitrust regulators that the company change the way it does business on the Continent.

The company did not make its 100-page appeal public but issued a statement yesterday saying the European Commission's ruling restricts innovation and undermines the efforts of successful companies.

In the statement, Microsoft's top lawyer in Europe said consumers and European companies benefit from competition, and their interests should be at the heart of the case.

"The legal standards set by the commission's decision significantly alter incentives for research and development that are important to global economic growth," said the lawyer, Horacio Gutierrez.

Microsoft has said all along that it planned to appeal the decision, which ended a five-year investigation by the commission, the executive branch of the European Union.

In its filing with the EU's Court of First Instance, based in Luxembourg, the company also asks that the court annul or substantially reduce the fine of 497 million euros--about $609 million--that accompanied the ruling. The fine is the largest the EU has imposed in an antitrust case.

European regulators found that Microsoft had broken competition laws on the Continent, saying it gained an unfair advantage by failing to give rivals necessary information and by packaging its media player with its Windows computer-operating system.

The regulators ordered the company to disclose more about the inner workings of Windows to rivals that make network server computer products, and to sell a version of Windows in Europe stripped of its media player. The provisions were to take effect in 120 days and 90 days, respectively, unless a court ordered a stay.

Microsoft said yesterday it would ask for a stay within weeks. The request would be filed separately from the appeal, and, if granted, would give the company more time before it has to comply with the ruling. The stay could last for the duration of the appeal, which may take years.

The company would not comment yesterday beyond its statement. Its chief counsel, Brad Smith, has said that the ruling runs afoul of international treaties, including intellectual-property protections under the World Trade Organization.

The appeal highlights a pattern of behavior by Microsoft, a company that steadfastly refuses to be restricted on what it can or cannot add to its products. That issue is likely to be central to its appeal.

The European case started five years ago after Santa Clara, Calif.-based Sun Microsystems complained to the EU that Microsoft refused to give enough information for Sun to develop products that work with Windows-based computers.

In 2000, the commission expanded its investigation to include Microsoft's bundling of its media player with Windows.

In its appeal, Microsoft is likely to note that Sun Microsystems in April dropped its private antitrust case against the company. In return, Microsoft agreed to pay Sun nearly $2 billion to resolve antitrust and patent issues and to license technology.

Sun said the agreement addressed its complaints in the EU case.

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MSFT, SUNW,

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