Microsoft Loses EU Appeal

The European Union (EU) have announced that it will uphold anti-trust fines against Microsoft in its on going case against the company. Court of First Instance President, Judge Bo Vesterdorf, dismissed Microsoft's appeal against a lower court's decision, and has decided that Microsoft should pay what amounts to the biggest fine handed out in the European Union's history.

The fine relates to a judgement made in March of 2004, stating that Microsoft had abused its dominance of the desktop software market. Microsoft was ordered to split off Windows Media from the Windows O/S, and to share key parts of its server code with rivals. The company's appeal had asked the EU to delay payment of the fine and the under-taking of these sanctions until resolution of the case, which is still on going and could be for many more years. The EU turned down the appeal, stating "Microsoft has not demonstrated specifically that it might suffer serious and irreparable damage". The company is rumoured to have cash reserves of as much as $50bn.

Microsoft placed $600m in an escrow account back in July for payment to the EU, depending on the outcome of the trial. The EU levied fines of €479m (~$641m today) back in March. Microsoft have yet to announce its specific intentions on the ruling (which are expected later today) suggesting that it might have actually expected the appeal to go its way. However, an initial company statement expressed its disappointment with the ruling; Microsoft "believe that there are better ways to address such complex and technical issues, with a minimum of harm to European consumers and the European technology sector". However, Microsoft stated that "the Court recognized that some of our arguments on the merits of the case are well-founded and may ultimately carry the day when the substantive issues are resolved in the full appeal".

The company is clearly hopeful that later appeals and negotiations with the EU could get it off the hook in some areas. However, this is the first time a court could actually force the company to be more competitive, by dictating exactly what products it is allowed to bundle with its operating system. The ruling is a massive victory for critics of Microsoft, and undoubtedly a great step forwards (despite what Microsoft would tell you) for consumers in Europe. Thus, expected a Windows sans Media Player as soon as January in Europe, and "interface documentation" for its server products around the same time.

View: Microsoft.com