Microsoft Loses EU Anti-Trust Appeal

Kugrian writes "Microsoft has lost its appeal against a record 497m euro (£343m; $690m) fine imposed by the European Commission in a long-running competition dispute. The European Court of First Instance upheld the ruling that Microsoft had abused its dominant market position."

Court's press realease

[zombie_monkey]

http://curia.europa.eu/en/actu/communiques/cp07/aff/cp070063en.pdf [europa.eu]

They have not yet paid another fine that was imposed on them for not paying this fine, as the BBC article mentions, although in no great depth:

Last year, Microsoft was told to pay daily fines adding up to 280.5 million euros over a six-month period, after it failed to adhere to the 2004 decision.

http://news.bbc.co.uk/2/hi/business/4552214.stm [bbc.co.uk] - another BBC piece specifically about the daily fines. Does anyone know if they've paid them or not by now?

Re:A Pittance of a Fine.....

[zebslash]

The problem for them is not the fine, but instead, from now on, the compliance to the ruling, which will lead them to change the content of Windows software, the parts they will be able to install on new computers. That's a lot more important than money.
Don't forget the ruling is 152-page long, and therefore, they will have to digest and comply with all the court orders to avoid paying even more fine. That may be difficult for them in a market that becomes more competitive.

Re:Please queue the anti EU replies here

[Corporate Troll]

Won't queue anything here. Anyone who knows a bit about the EU, know that this is bollocks. They go after anyone abusing the market. As Volkswagen [wsj.com], for example... Not a US company at all...

Re:Damages, but sanctions?

[sepluv]

The fines will increase (exponentially I believe) until they pay. The court can freeze and seize their European assets and they have much of their money within the EU in Ireland as a US tax dodge. Also, the EU is by far MS's largest market. Not complying would be a BAD idea.

BTW, the legal detail is over at Groklaw [groklaw.net] (basically the court sided with the EC except a minor point about the EC giving too much power to the MS appointed monitoring trustee) and there is a joint FSFE/Samba press release [fsfeurope.org]. Also, the the court published the full judgement and other court docs [europa.eu].

Re: Least important part of the judgement...

[Dolda2000]

Note, though, that it isn't actually code that they have been ordered to release, but rather protocol specifications. Which is, of course, what everyone wants. No article I've read on the subject so far has made any mention of how the specifications need to be licensed, however. If anyone is in the know, please share that information.

Re:who cares..,

[headkase]

As for a CD player "bundled" with a car, CD's follow an ISO standard so with all manufacturers following a standard the consumer is completely free to replace the player with another from a different supplier. This means that competition is unhindered so the market can work as intended - the case of providing a CD player with a car is a matter of convenience for the customer not an anticompetitive act.

Re:Go Samba

[Anonymous Coward]

Let's just hope that Microsoft doesn't decide to get a little medieval (or litigious) and throw up a bunch of lawsuits to stop Samba's blatant infringement

Where do people get stupid ideas like that from?

Microsoft networking is an obscured version of the SMB protocol. SMB is IBM's invention, not Microsoft's.

Microsoft obscured IBM's SMB protocol into Windows networking after Microsoft had gained a dominant market share. Microsoft has no patent about that obscuration ... because in order to get a patent one must reveal how an invention works.

Samba infringes nothing. Samba is just another implementation of IBM's SMB protocol, obscured in the same trade-secret way that Microsoft obscured it. It is perfectly legal (and in no way infringing anything) to reverse engineer a trade secret.

Patents clearly do not, and cannot apply here.

Monopolies are not illegal

[Roy Ward]

Abusing a monopoly (anti-competitive behaviour) is illegal.

When a company has a monopoly, they get some extra rules to play by. Microsoft has not been following these.

It's ironic choice of car analogy

[EMB Numbers]

It's ironic that you chose your particular car analogy, because there was a famous USA court ruling that car manufactures could not artificially restrict the ability of third parties to install car radios not supplied by the car manufacturer. USA auto manufacturers tried to force customers to buy radios exclusively from the car manufacturer by using non-standard electrical connections and deliberately restrictive physical constraints. Then the car manufacturers claimed that their physical constraints and connector designs were protected intellectual property.

The fight continues to this day: See the "Right to Repair" act. http://www.aftermarket.org/Government/Government.asp [aftermarket.org]

Re:What about Apple?

[Verte]

As an economics major, then, you should realise that the problem is leveraging a monopoly in one market to create one in another market. I'm not sure exactly what monopoly you're suggesting Apply used to force their way into the pmp & digital music market. It's not like you can't use other stores to buy music for your iSnod. iTunes do not own the digital music distribution market either.

Re:This isn't justice: too little, too late

[Sczi]

More amusing are the comparisons I've heard about how fast Vista is: "slow as a dying dog", "as a overweight grandma on a treadmill", "turtle on vicodin", "turtle dipped in mud climbing uphills"... Microsoft's own software (Office 2003, VS 2005, etc.) isn't compatible with their own OS right now.

OMFG, I just can't let this stand. I don't know if you know this or not, but you're full of crap. I almost hope you're being malicious and not just ignorant. I'm running Vista Business X64 on an original pentium d, 3.0, with 2gigs of pc3200 ddr, and a $40 video card. As a test, I just tried to beat this pc to death by multitasking the following: excel 2003, excel 2007, word 2003, word 2007, access 2003, access 2007, publisher 2003, publisher 2007, visual studio 2003, visual studio 2005, windows media player 11 (playing an mp3 with visualization running, coldfusion studio, firefox, ie7, opera, photoshop 7, thunderbird, and last but not least, Taskman.exe. Keep in mind these are all 32bit apps running on x64, so I'm taking an even bigger performance hit than usual.

Now, before I slap you down for spouting FUD, would you care to wager a guess as to my overall system usage and responsiveness during multitasking? Based on your statements above, I should not even be able to submit this post right? Hell, I should be experiencing an 8 second delay by now from when I press a key to when I see it appear in the text box. Would you guess that each app was as responsive as when I only had one or two open? Maybe you'd guess that it was starting to chunk just a tad but was still usable? Maybe you think I got a blue screen and had to reboot to post this? An honest guess, please.. preferably an educated guess

I don't expect anyone to fall to their knees and kiss Vista's feet, but for the love of God, give credit where credit is due, otherwise it's like the boy who cried wolf, and when something serious finally comes to light, it will be drowned out in a sea of "OMG, Vista is teh suxorz, lol". Karma be damned, you fud spreaders are about to start hearing from me.

VISTA == PRETTY DECENT
OS non-religious, ftw.

Re:This isn't justice: too little, too late

[suv4x4]

As if offering Microsoft Windows XP across the board blunts the monopoly. In freer countries, one can walk into a random computer store and buy notebook computers without any Microsoft at all (and I have the store datasheets in hand to prove it), but not in San Jose, California. There's a reason for that beyond simple supply and demand economics.

There is no damn monopoly. There's OSX, there's Linux, DELL and Lenovo offer it preinstalled even. And you can buy Mac machine with OSX.

Don't be naive. The whole monopoly crap is back in the mid nineties. Microsoft no longer has monopoly. There are plenty of good choices around. And exactly because of this, as I told you, many people in US I know converted to Mac this year.

I'm talking about pressing issues here, that we feel not abstractly and indirectly, but quite painfully directly: Vista is crap, and we want the ability to order our machines with XP.

Re:I still don't like it.

[MathFox]

The EU is punishing a company for violation of EU competition laws. Most of the time European companies, but this time it is an US company. (Isn't that company under US court overview for some actions?)
The problem is that EU competition law has some restrictions on the size of the fine, it used to be 10% of revenue maximum at the time MS was fined... currently the maximum fine is 25% of revenue. However, it is not common in Europe to go for the maximum punishment on the first offence. While the 500 million Euro may feel like a parking fine to Microsoft, the next fine is likely to be bigger.
Note: This is the verdict on appeal in the "Windows XP" case... Microsoft has appealed a few "heel dragging" additional fines too. The European Commission has not sat silent during this appeal, but started investigating the "Windows Vista" complaints (add a dash of Office to that too). There is no Commission verdict on that yet, but I predict a guilty there too (firewalls, anti-virus).

Re:Quel surprise!

[Tom]

Surprise surprise, a European court decided to rob an American company of half a billion dollars,

Language is a bitch if you can't use it properly. See "to rob" means "a: to deprive of something due, expected, or desired b: to withhold unjustly or injuriously" (merriam-webster). A court, being the place that finds on issues of just or unjust, doesn't "rob".

Yes, I know you didn't mean it literally, but only to evoke the emotion of injustice and pitty for the poor victim - which is exactly why I point it out. MS isn't a poor victim, but a legally convicted criminal - btw. in the US as much as in the EU.

after said company complied with order after absurd order to change its practices.

The court says different. Last I checked, courts and not random /. users decide if a criminal complied with his probation conditions.

Re:This isn't justice: too little, too late

[walt-sjc]

There is no damn monopoly.

The EU and US courts say you are wrong. Sorry. The legal definition (which is the only relevant one in this discussion) is not quite the same as the classical dictionary version you hold on to. From a legal standpoint you do NOT need 100% of the market to be a monopoly.

we want the ability to order our machines with XP.

You have that now. You can order XP based machines from every major vendor.

Re:From the way the article reads...

[SEMW]

The problem MS has is that it claimed in U.S. court and in front of Congress that it could not remove WMP or IE from Windows because they were so tightly integrated. If it complies with the EU, it could be charged with perjury here in the U.S. and it could also have some interesting effects as it might cause a new browser lawsuit.

No. Two different things. The US suit was about IE, not WMP; IE was what Microsoft claimed was too tightly integrated into the OS. The EU suit was the one that was (among other things) about WMP, and MS *did* make an edition of Windows without WMP in back in 2004. (It was sold for the same price as regular Windows, and IIRC, it sold something like seven copies in total worldwide. Go figure.)

que?

[Toreo asesino]

Rubbish. Take a look at EU anti-trust cases, and you'll see there's plenty of home-grown cases too.

http://ec.europa.eu/comm/competition/antitrust/cases/index/by_nr_75.html [europa.eu]

We love you Americans really....let's kiss and make-up ok?

Re:This isn't justice: too little, too late

[sammy baby]

Liberals may not win any elections, but they sure won one part of the "small, powerless government" agenda, and it ain't the "small" one.

Um... at the risk of hijacking a perfectly good discussion of antitrust into a "liberals vs conservatives" argument, the sentence I quoted gave me pause. Are you suggesting that a traditionally liberal argument is for powerless government? Because I don't know anyone of any political stripe who perceives "small, powerless government" as a "liberal" value.

I mean, unless you think Grover Norquist [wikipedia.org] is a liberal.

Re: Least important part of the judgement...

[hankwang]

No article I've read on the subject so far has made any mention of how the specifications need to be licensed, however. If anyone is in the know, please share that information.

Here is the full EC ruling of 2004: Commission Decision of 24.03.2004 relating to a proceeding under Article 82 of the EC Treaty (Case COMP/C-3/37.792 Microsoft) [europa.eu]. It contains all the reasoning behind the decision in surprisingly non-legalese English, as well as the decision itself on page 299--301:

5a) ... make the Interoperability Information available to any undertaking having an interest in developing and distributing work group server operating system products and shall, on reasonable and non-discriminatory terms, allow the use of the Interoperability Information ...

What defines "reasonable" is defined in articles 1005 and further on page 280:

1008-ii) to any remuneration that Microsoft might charge for supply; such a remuneration should not reflect the strategic value stemming from Microsofts market power in the client PC operating system market or in the work group server operating system market;
1008-iii) to restrictions that Microsoft may impose as to the type of products in which the specifications may be implemented; such restrictions should not create disincentives to compete with Microsoft, or unnecessarily restrain the ability of the beneficiaries to innovate;

The appeal decision is here [europa.eu], but since it basically concludes with "the 2004 ruling is mostly upheld", it is not so interesting to read.

Thomas Jefferson

[falconwolf]

I finally decided short of taxing 100% of wealth over about 10 million dollars (to keep us a jeffersonian democracy of many tiny wealthy people), that it just isn't going to happen. I'm beginning to think that the corporate structure is fundamentally flawed and will inevitably lead to aristocracy.

What's flawed is government's treatment of corporations. Like Thomas Jefferson warned of a Corporate Aristocracy has arisen which uses government for it's own advantage. Corporations were originally granted charters [google.com] if and only if they served the public good. The first corporations to be chartered were the Dutch East India Company [wikipedia.org] which the first multinational company, in the Netherlands and the Honorable East India Company [wikipedia.org] in England in 1600 and 1602. They were granted corporate charters because of the need for limited liability and so that many small investors could pool their money together to make investments. Both companies were in risky businesses, shipping. A ship might sink or be attacked by pirates, and the company or ship owner was responsible for the loss of the cargo, the owner of the cargo had to be repaid for the loss. A small investor in a ship could lose not only what they invested in the ship but everything they owned. By chartering corporations investors were only liable for what they invested, if they bought stocks in a ship for $1000 and it sank the most they could loose is that $1000. Government has the power to revoke charters if a corporation no long does that however it's no longer enforced.

Falcon