The European Court of First Instance said on Monday that it upheld the European Commission's antitrust decision against Microsoft, in what could prove to be a crucial regulatory landmark.
The Court dismissed Microsoft's appeal on all substantive points. Its statement follows:
The Court of First Instance essentially upholds the Commission's decision finding that Microsoft abused its dominant position.
However, the Court has annulled certain parts of the decision relating to the appointment of a monitoring trustee, which have no legal basis in Community law.
On 23 March, 2004 the European Commission adopted a decision finding that Microsoft had infringed Article 82 of the EC Treaty by abusing its dominant position by engaging in two separate types of conduct. The Commission also imposed a fine of more than €497m (£344m) on Microsoft.
The first type of conduct found to constitute an abuse consisted in Microsoft's refusal to supply its competitors with "interoperability information" and to authorise them to use that information to develop and distribute products competing with its own products on the work group server operating system market, between October 1998 and the date of adoption of the decision. By way of remedy, the Commission required Microsoft to disclose the "specifications" of its client/server and server/server communication protocols to any undertaking wishing to develop and distribute work group server operating systems.
The second type of conduct to which the Commission took exception was the tying of Windows Media Player with the Windows PC operating system. The Commission considered that that practice affected competition on the media player market. By way of remedy, the Commission required Microsoft to offer for sale a version of Windows without Windows Media Player.
In order to assist the Commission in monitoring Microsoft's compliance with the decision, the decision provided for a monitoring trustee to be appointed by the Commission from a list of persons drawn up by Microsoft. The monitoring trustee's primary responsibility would be to issue opinions, upon application by a third party or by the Commission, or on his own motion, on whether Microsoft was complying with the decision and on any issue that might be of interest with respect to the enforcement of the decision. He was to have access to Microsoft's assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products. All the costs associated with the monitoring trustee, including his remuneration, were to be borne by Microsoft.
On 7 June, 2004 Microsoft brought an action before the Court of First Instance for annulment of the decision or for annulment or a substantial reduction of the fine imposed on it.
First, the Court confirms that the necessary degree of interoperability required by the Commission is well founded and that there is no inconsistency between that degree of interoperability and the remedy imposed by the Commission.
The Court then observes that the Commission defined interoperability information as a detailed technical description of certain rules of interconnection and interaction that can be used within Windows work group networks to deliver work group services. The Court notes that the Commission emphasised that Microsoft's abusive refusal to supply concerned only the specifications of certain protocols and not the source code and that it was not its intention to order Microsoft to disclose its source code to its competitors.
The Court also considers that the aim pursued by the Commission is to remove the obstacle for Microsoft's competitors represented by the insufficient degree of interoperability with the Windows domain architecture, in order to enable those competitors to offer work group server operating systems differing from Microsoft's on important parameters. In that connection, the Court rejects Microsoft's claims that…