Sept 17, 2007 - The European Court of First Instance rejected Microsoft's appeal against a $690 million dollar fine, BBC News first reported Monday
. The court threatens additional fines.
The ruling comes at the heels of a March 2004 European Commission decision wherein Microsoft was said to have violated "anti-competition" laws and was forced to offer a version of Microsoft Windows without Windows Media Player and to license code and specs from Windows to its competitors in the computer server market. Then, Microsoft was also fined 600 million USD.
The European court wrote in summary: "[Bundling Media Player] enabled Microsoft to obtain an unparalleled advantage with respect to distribution of its product and to ensure the ubiquity of Windows Media Player on client PCs throughout the world."
Microsoft General Counsel Brad Smith cautioned that the ruling gives the council a broad stroke of power that could harm other companies.
"The decision on the Media Player opens a dangerous precedent for other companies and sectors. Airbus should start worrying about adding new features to their planes," said Smith in reaction to the ruling.
One of the many determining factors in the ruling was the inflexibility in Windows to function with other computers systems. The 2004 ruling forced Microsoft to allow must allow competitors' programs to work on the Windows operating system, a problem many companies have been having while developing for the OS.
Last year, from failing to adhere to the 2004 decision, Microsoft was fined 280.5 million Euros (390.2 million USD).
Competitor and fellow Seattle-based software company, RealNetworks, had also recently settled its own lawsuit against Microsoft over similar issues, resulting in a settlement of $761 million.
"The court has upheld a landmark commission decision to give consumers more choice in software markets," Ms Kroes said in a statement.
"Microsoft must now comply fully with its legal obligations to desist from engaging in anti-competitive conduct."
Kroes has threatened further fines to the big M, potentially totaling more than $1.5 billion, over the terms proposed for the licenses. Kroes demands reasonable pricing, and wants the terms to be acceptable to companies that distribute open-source software.
"The ruling confirms more than ever that Microsoft must comply with its remedy obligation, and I will not tolerate continued non-compliance," Kroes said during her news conference.
Kroes called the verdict "bittersweet" stating that choice in the software marketplace is still moot.
BBC News also explains, for those of you who don't know Mrs. Kroes, who took the job as European Competition Commissioner in 2004, is responsible for a record high 0.69 billion euro fine in 2007 on four lift and escalator makers. BBC News writes:
"She has also been forced to deny pursuing a vendetta against Microsoft after fining the company for failing to comply with demands made by her predecessor, Mario Monti, and warning that the Vista operating system could fall foul of competition law."
Yesterday, the ruling stated it did fall foul. After the 2004 ruling, Microsoft offered the European consumer market a version of Windows without, just as asked, Windows Media Player, but the version has not been warmly received.
What does this all mean to consumers? Well, Microsoft's Steve Ballmer, in an e-mail to employees, had this to say:
"While we had hoped for a different outcome, it is important to recognize that the Court's judgment should not adversely affect our customers in the short-run. Today's ruling was very clear that we can still offer our full-featured products to our customers. While we do have concerns about how the legal precedents in the Commission's decision and today's ruling will affect innovation and intellectual property, we can still provide our customers with the same products, services and support that we were providing prior to today's decision."
Essentially, he states that things aren't going to change for Windows users, at least, not right now. Xbox users will likely not be affected at all. Windows users will probably see Windows becoming more open-source friendly. And what's so wrong with that? Smaller companies might then be able to make a profit through the Windows medium, essentially broadening scope from their usual Linux user. When smaller companies can thrive, consumers win.