Microsoft has lost the appeal made to the Court of First Instance against the European Commission's (EC) ruling of monopoly abuse that obliged Microsoft to grant competitors access to its server protocols and to unbundle its Media Player software from its Windows operating system .

The case has a long history; following a complaint in 2003 from Novell that accused Microsoft of making server protocol information unavailable, the European Commission gave a preliminary ruling ordering Microsoft to unbundled Windows Media Player from Windows and to give information to competitors to ensure compatibility with Windows servers. Considering Microsoft had not complied with that ruling, in March 2004, the European Commission fined Microsoft with the highest fine in the EU history - 497 million euro.

Microsoft paid the fine but made an appeal to the Court of First Instance which, on 17 September 2007 rejected this appeal with the exception of a small part related to the appointment be the EC of a monitoring trustee "with the power to have access, independently of the Commission, to Microsoft's assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products". The costs related to the trustee were to be supported by Microsoft.

"The Court finds that the Commission did not err in assessing the gravity and duration of the infringement and did not err in setting the amount of the fine. Since the abuse of a dominant position is confirmed by the Court, the amount of the fine remains unchanged at EUR 497 million" said the official press release of the Court.

Following the decision, José Manuel Barroso, President of the European Commission stated: "This judgement confirms the objectivity and the credibility of the Commission's competition policy. This policy protects the European consumer interest and ensures fair competition between businesses in the Internal Market."

The decision was considered by Competition Commissioner Neelie Kroes as a great victory: "That decision set an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high tech industries. The Court ruling shows that the Commission was right to take its decision. Microsoft must now comply fully with its legal obligations to desist from engaging in anti-competitive conduct. The Commission will do its utmost to ensure that Microsoft complies swiftly."

The court's decision was largely welcomed by several organisations. "Microsoft can consider itself above the law no longer. Through tactics that successfully derailed antitrust processes in other parts of the world, including the United States, Microsoft has managed to postpone this day for almost a decade. But thanks to the perseverance and excellent work of the European Commission, these tactics have now failed in Europe" said Georg Greve's, president of the Free Software Foundation Europe. Open Forum Europe also stated: "OpenForum Europe welcomes this decision, and looks to the whole ICT industry to respond by taking positive steps to increase competitive choice."

The reaction of the U.S. Department of Justice was, not surprinsingly, a critical one to the decision of the Court of First Instance and Thomas O. Barnett, the assistant attorney general for antitrust, declared on 17 September that the decision would have "the unfortunate consequence of harming consumers by chilling innovation and discouraging competition."

In response to this statement, Neelie Kroes considered the US officials' judgement as totally unacceptable: "The European Commission does not pass judgement on rulings by U.S. courts and we expect the same degree of respect from U.S. authorities on rulings by EU courts," she said.

Microsoft's top lawyer said that the first priority of the company was to comply with EU competition law and that the company has not yet taken any decision related to the next legal steps. Microsoft has two months to appeal the decison to the European Court of Justice.

Press Release No 63/07 - Judgement of the Court of First Instance in Case T-201/04 -Microsoft Corp. v Commission of the European Communities (17.09.2007)
http://curia.europa.eu/en/actu/communiques/cp07/aff/cp070063en.pdf

Court dismisses Microsoft appeal in antitrust case (17.09.2007)
http://www.euractiv.com/en/infosociety/court-dismisses-microsoft-appea...

Microsoft loses anti-trust appeal (17.09.2007)
http://news.bbc.co.uk/1/hi/business/6998272.stm

AUS Faults US Comment on Microsoft Ruling (19.09.2007)
http://ap.google.com/article/ALeqM5jLvPjjYNmnwkYA7J_LjIiEN2Oxkw

EDRI-gram: Microsoft gets record-breaking fine (24.03.2004)
http://www.edri.org/edrigram/number2.6/microsoft