Microsoft Fails to Overturn $1B Antitrust Fine

A European court has upheld a $1 billion fine on Microsoft, originally imposed four years ago. The penalty was punishment for Microsoft refusing to share vital information with rival software developers.

Microsoft's financial problems with the European Union date back to 2004, when it was fined 497 million euros for abusing its market position.

That case was based on the conflict of interests arising from Microsoft producing both an operating system (Windows) and individual applications (such as Word and other Office products).

Microsoft Accused of Hiding Information

At the time, officials said Microsoft had deliberately made it harder for independent software companies to develop rival applications. The court agreed, and along with the fine, ordered Microsoft to reveal more information about Windows to rivals.

Since then, Microsoft hasn't complied with these orders to the satisfaction of officials. As a result, the court has assessed financial penalties. In 2008, the fines and penalties totaled 899 million euros, equivalent to US $1.12 billion.

Although Microsoft paid up, it appealed the case to a senior European court. The company argued that the size of the fine was excessive and didn't reflect the actual amount of damage its actions had caused.

European Judges Say Penalty Valid

That senior court has now found the original ruling valid, and the size of the fine appropriate. However, it noted that European officials had acknowledged there was a limit on how much data Microsoft could hand over to its rivals, and that the penalty didn't fully consider this limit.

For this reason, the court reduced Microsoft's total fine to 860 million euros (US$1.07 billion), a token reduction of just over four per cent.

The court made clear, however, that this reduction was based on a technicality, and that it had rejected every argument put forward by Microsoft in the appeal. (Source: businessweek.com)

In theory, Microsoft has one last appeal option left: to the European Court of Justice, the highest court in the European Union.

As with the United States Supreme Court, this court doesn't deal with the facts of a case, but focuses on the way lower courts have interpreted and applied particular laws.

At this stage, experts say it seems unlikely Microsoft will make this last appeal. Analysts believe any appeal would likely fail, and suggest it may be more productive for the company to concentrate on building better relations with European officials. (Source: wsj.com)