14 DAY TRIAL // Yesterday, the Court of First Instance in Luxembourg upheld the European Commission's March 2004 antitrust decision against Microsoft, finding that the company had abused its dominant market position with its Windows client. Back in 2004, the EU antitrust regulators ruled that the Redmond company had leveraged its Windows monopoly in order to push up its share on the work group server operating systems and for media players markets. Because the European Commission found Microsoft to have interfered and obstructed competitors on the markets mentioned above, in order to elbow out rival products, the Redmond company received a financial penalty of ?497 million.
The Court of First Instance supported the totality of the fine imposed against Microsoft in its decision, and dismissed most of the appeal filed against the EU Commission. But instead of coming out with all guns blazing, Microsoft proved that it is now aiming to play well with rivals on the European market. Brad Smith, Senior Vice President, General Counsel, Corporate Secretary, Legal & Corporate Affairs, Microsoft revealed that the company will look to comply with the conclusion of the European Commission, as upheld by the Court of First Instance.
"We are 100 percent committed to complying with every aspect of the Commission's decision. As you all know, this decision fundamentally focuses on two things: the integration of Windows Media Player and the interoperability issues and the compulsory licensing of Microsoft's communications protocols, especially in the server market. When it comes to the Media Player side of the case, we have had, on the market here in Europe, for over two years, a version of Windows that fully complies with the 2004 decision," Smith stated.
Microsoft has been offering Windows XP N, the version of the operating system stripped of the Windows Media Player in Europe for a couple of years now. Additionally, the company delivered Windows Vista Home Premium and Windows Vista Business N for Europe, as a direct result of the March 2004 antitrust decision. Still, statistics indicate that both editions of Windows Vista have failed dramatically to appeal to customers.
Still, when it comes down to the interoperability protocols for the Windows operating system, Smith did acknowledge that Microsoft has yet to do its part. "With respect to interoperability, a great deal of work has been done. I would even go so far as to say that some progress has been made, yet we would also have to acknowledge that there are some issues that remain open and that we will wish to address as quickly as possible. It has not always been an easy process in terms of developing, creating and publishing the technical documentation that is required by the decision," Smith added.
Microsoft's General Counsel blamed the slow pace at which Microsoft had been moving on the "unprecedented nature of that obligation". However, he added that the technical specifications are as complete as they can be at this point. In respect to the interoperability protocols, the European Commission opined in the past that the prices charged by Microsoft for licensing its technology were excessive in correlation to the small amount of innovations delivered. Subsequently, the Redmond company dropped the prices, and Smith stated that Microsoft is ready do address any further issues.
"If the Commission feels that our prices are still too high, we will, of course, want to understand that very quickly so that we can address it. The current price for protocols that are incorporated into products distributed in Europe is 1 percent of the revenue generated from the product, which is obviously quite a bit lower than it was before, and we will be focused on addressing that quite quickly if there is a need to do so," Smith promised.
One thing that remains undecided is if Microsoft will appeal the decision of the Court of First Instance. Smith failed to comment on the issue, except to say that the matter of an appeal was still in consideration. However, Microsoft can take its due time, as it has two months in order to respond with another legal filing.