Microsoft fails to get £576m EU fine scrapped – but wins tiny discount

The software giant has won a small reduction in its antitrust fine over Windows interoperability but failed to have it dismissed entirely, after the EU's General Court threw out all of Microsoft's main arguments

Microsoft has failed to get its mammoth EU antitrust fine scrapped, but it has succeeded in getting its payments reduced slightly.

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Microsoft has won a small reduction in its EU antitrust fine over Windows interoperability but failed to have it dismissed entirely.

The fine, which the software giant has already paid, now stands at €860m (£719m) rather than €899m, the General Court of the European Union said on Wednesday. It was levied on Microsoft for failing to comply with a ruling in 2004 by the European Commission, which found the company had been unfairly denying open-source competitors the protocols they needed to make their server software interoperable with Windows.

"Although the General Court [of the EU] slightly reduced the fine, we are disappointed with the Court's ruling," Microsoft said in a statement on Wednesday, shortly after the decision (PDF) came through.

When it made its ruling in 2004, the European Commission levied a €497m fine on Microsoft. It then added a €280.5m fine in 2006 because the software giant was still not meeting the terms of the antitrust decision. Microsoft appealed, but failed to prevail in a judgement in 2007.

That was followed by yet another fine in 2008, this time a record-setting €899m, because the company was still not sharing the interoperability information it was required to on 'reasonable and non-discriminatory' (RAND) terms. That fine covered the period from 21 June, 2006 to 21 October, 2007. Microsoft launched a fresh appeal a year ago.

Penalty reduced

On Wednesday, the General Court said it has reduced the penalty because in 2005, the Commission told Microsoft it could keep withholding the interoperability information while it was waiting for the 2007 judgement.

However, sharing the information was only a "marginal" part of Microsoft's obligation, the court said — the bulk was to do with licensing the relevant technology patents on RAND terms, which it also failed to do. For that reason, the court only cut the fine by €39m.

The court threw out every argument Microsoft presented in its bid to have the fine annulled. It said the company had indeed been in a position to assess for itself whether the licensing rates it was seeking were reasonable, and that the Commission's criteria for working out the value of the relevant technology were sound.

"Furthermore, the Court considers that Microsoft has failed to invalidate the Commission's assessment that 166 of the 173 technologies relating to the interoperability information were not innovative," the ruling said.

Microsoft has recently become a strong supporter of RAND or FRAND (including the word 'fair') terms, particularly when it comes to the licensing fees Motorola wants for standards-essential patents.

Indeed, Motorola is now under investigation by the EU antitrust authorities over its use of FRAND-protected patents as legal weapons, following a complaint by Microsoft.