The European Court of First Instance in Luxembourg on Monday dismissed Microsoft Corp.’s appeal against the European Commission’s 2004 decision requiring it to share information about its software with competing companies and to cease bundling its Windows operating system with Windows Media Player.
In a ruling that represents a key victory for European competition regulators over the American software giant, the court rejected Microsoft’s appeal on all counts. It also upheld the validity of the EC’s fine of 497 million euros – the largest fine ever imposed by European regulators. The court stated that the Commission correctly concluded that Microsoft was guilty of exploiting its monopolistic position by attempting to leverage its dominance in the desktop computer market to push into the server software market. Furthermore, the court concluded that European regulators clearly demonstrated that the sale of media software with Windows harms fair competition.
"The Court of First Instance essentially supported the Commission’s decision that Microsoft exploited its dominant market position," the court stated in a press release. "The court finds it indisputable that due to the bundling of Windows and Windows Media Player, users cannot purchase the Windows operating system without simultaneously purchasing Windows Media Player," the court further stated. "The court considers that neither the fact that Microsoft does not charge separately for Windows Media Player, nor the fact that users are not obliged to use it, is irrelevant." The European Commission, which has far-reaching powers in controlling competition and merger activities, determined in 2004 that Microsoft used its 95 percent share of the personal computer operating system market to squeeze out and harm its smaller competitors.
