EU court upholds Microsoft antitrust penalty, lowers it slightly

Summary:An E.U. court has upheld a penalty fine handed to Microsoft following an antitrust decision in 2004.

An E.U. court said on Wednesday that it will uphold an €899 million ($1.1bn) penalty handed out in 2008 by the European Commission, but will lower it by €39 million ($48m).

The European General Court, the second highest court in the E.U., said today it will lower the fine to €860 million ($1.07bn) following an antitrust ruling nearly five years ago.

"The General Court essentially upholds the Commission's decision imposing a periodic penalty payment on Microsoft for failing to allow its competitors access to interoperability information on reasonable terms," the Luxembourg-based court said in a statement.

The fine was lowered thanks to a letter sent by the Commission in 2005 saying Microsoft didn't have to freely distribute code that wasn't its own, and was already freely available elsewhere. Microsoft thought it was acceptable to continue acting in a way it had done so until 2004.

The case goes back to 2004 following Microsoft's decision to charge "unreasonable" prices for access to code that would allow competitors' products to interface property.

The European Commission has the power to fine a company up to 10 percent of its global annual turnover if they are found to be in breach of E.U. antitrust laws.

Microsoft was first fined €497 million in 2004, then slapped with a €280.5 million non-compliance penalty in 2006. In 2008, it was handed the €899 million fine that was under contest in the Luxembourg court.

The Redmond-based company said it wasn't given enough time to appeal the first decision, and was none the wiser about how much a "reasonable rate" it was expected to charge its competitors because the Commission failed to explain its reasoning.

Microsoft's penalty was a record for the time --- a figure which was subsequently beaten by Intel, who ended up falling foul of the E.U. antitrust regulators and was slapped with a €1.06 billion ($1.4bn) fine.

Intel is following Microsoft's lead and appealing its fine to the same court.

All in all, Microsoft's series of fines and penalties has cost the company a grand total of €1.64 billion ($2.05bn).

Microsoft said it was "disappointed" with the court's decision, but did not say whether it will appeal the ruling to the highest E.U court, the European Court of Justice.

"The fine, which was paid several years ago, related to the price Microsoft had proposed for one of several forms of licenses for technology Microsoft was required to make available by the Commission’s 2004 decision. In 2009, Microsoft entered into a broad understanding with the Commission that resolved its competition law concerns,” a Microsoft spokesperson said.

Image credit: Microsoft.

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Topics: Security, Enterprise Software, Government, Government : UK, Microsoft

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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