Microsoft loses legal battle

Regulators claim company abused power

BRUSSELS — Software giant Microsoft has lost its legal challenge to a ruling by European regulators alleging that it is abusing its dominant position in the software market.

The European Court of the First Instance decided Monday that most of the remedies demanded by the European Commission in 2004 should stand, including a fine of E497 million ($689 million).

The EC complained that Microsoft was limiting competition by refusing to supply interoperability information that would allow other operating systems to be developed for work group servers. Meanwhile, the media player market was held back by the bundling of Windows Media Player with the Windows operating system.

Both criticisms, and the remedies demanded, such as the release of server communication protocols, were upheld by the court. It added that the fine measured up to the “gravity and duration of the infringement.” Microsoft’s only victory was the overturning of an EC demand that a monitoring trustee be appointed to check the company’s compliance with the remedies.

Microsoft’s options for appeal are limited to points of law. It must decide in the next two months whether to take the case to the European Court of Justice.

Speaking after the ruling, Microsoft general counsel Brad Smith emphasized the progress the company had made since 2004 in meeting EU demands.

“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,” he said.

However, competition commissioner Neelie Kroes was dismissive.

“On the markets concerned by the decision, businesses and individuals are faced with no more choice than they were three years ago,” Kroes said.

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