Court upholds £345m Microsoft fine

Europe's second highest court upholds judgement that Microsoft abused dominant position

Europe’s second highest court has upheld the European Commission's (EC) decision to fine Microsoft €497m (£345m) for abusing its stranglehold of the software market.

The EC slapped Microsoft with the record penalty in March 2004 after concluding the vendor was guilty of abusing its dominant market position. It also ordered Microsoft to let rivals work with Windows PCs and servers by disclosing interoperability data.

This morning, Microsoft lost its three-year battle to overturn the fine after the Court of First Instance upheld the EC’s decision.

Competition Commissioner Neelie Kroes said in a statement: “The Court has upheld a landmark Commission decision to give consumers more choice in software markets.

“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.”

Open source software vendor Red Hat immediately hailed the decision.

“Today’s decision is great news for innovation and consumer choice, both in Europe and around the world. The Court has confirmed that competition law prevents a monopolist from simply using its control of the market to lock in customers and stifle new competitors,” it said in a statement.

Brad Smith, Microsoft’s senior vice president and general counsel, stated: “It's clearly very important to us as a company that we comply with our obligations under European law. We'll study this decision carefully, and if there are additional steps that we need to take in order to comply with it, we will take them.”