Questions Fly as Microsoft Files EU Appeal

As expected, Microsoft filed an appeal of its European Union (EU) antitrust case yesterday and asked the European Court of First Instance to suspend the company's $612 million fine and required product changes until the appeal can be heard. Although legal experts expect the court to grant Microsoft's request, EU Competition Commissioner Mario Monti believes that the software giant will lose its appeal.
"The \[European\] Commission's decision undermines the innovative efforts of successful companies, imposing significant new obligations on successful companies," Microsoft Associate General Counsel for Europe Horacio Gutierrez said. "We believe that the interest of consumers and other European companies should be at the heart of this case. Consumers and the industry benefit from product innovation and competition."
According to the original verdict, Microsoft had until the end of this month to release a new version of Windows XP without a bundled copy of Windows Media Player (WMP), then 30 additional days to make more of its server interoperability code available to competitors. However, the company won't have to meet those requirements if the decision is annulled until the court determines the appeal's validity.
Although a stay is likely, Monti says that the EU case will withstand any appeal. "In good conscience, we feel pretty much comfortable, and we look forward with confidence to the very likely court procedure," he said. "We believe we have a strong case to bring to court." The Commission, which investigated Microsoft for 5 years before recommending that the EU find the company guilty of antitrust abuses, spent an unusually long time rendering its decision so that the case would withstand legal challenges.
Microsoft isn't the only group that has a problem with the EU verdict. Trustbusters in the United States are still complaining that the EU verdict is too strict. US Assistant Attorney General for Antitrust Hewitt Pate even suggested this week that the original US decision to break up Microsoft, a requirement that the US Department of Justice (DOJ) later dropped during Microsoft's appeal phase, pales in comparison to the EU decision. "The US break-up remedy was advocated in part to avoid forward-looking regulatory decisions such as product design," he said. "\[The US has\] a more Darwinian view of the competitive process; over here, more attention is paid to make sure that dominant firms limit themselves to gentlemanly competition."
Despite the rhetoric, both sides have some time to mull over their legal strategies. The Court of First Instance could take as long as 3 or 4 years--an epoch in the fast-moving computer industry--to render a final verdict in the case.

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