Microsoft News Tracker

The Reuters’ headline says it all - EU court crushes Microsoft’s antitrust appeal:

Microsoft suffered a stunning defeat on Monday when a European Union court backed a European Commission ruling that the U.S. software giant illegally abused its market power to crush competitors.

The European Union’s second-highest court dismissed the company’s appeal on all substantive points of the 2004 antitrust ruling.

The court threw out just one small part of the European Commission’s ruling which allowed the independent monitoring trustee access to Microsoft employees, premises and documents independent of the Commission. Microsoft also gets to pay 80% of the Commissions’s legal expenses.

So what’s next?

The verdict, which may be appealed only on points of law and not of fact, could force Microsoft to change its business practices.

It also gives EU Competition Commission Neelie Kroes a green light to pursue other antitrust cases and complaints involving Microsoft, Intel, Qualcomm and Rambus, and to issue draft new antitrust guidelines that were put on ice pending the ruling.

“Microsoft must now comply fully with its legal obligations to desist from engaging in anticompetitive conduct. The Commission will do its utmost to ensure that Microsoft complies swiftly,” Kroes said in a statement.

Cue the Jaws theme music - the regulatory sharks are circling Vista and Office 2007. A preliminary statement from chief Microsoft lawyer, Brad Smith didn’t say too much other than the decision was being studied and that Microsoft was striving to be a good corporate citizen, but some supporting groups were more vocal:

Microsoft may have lost in court, but it quickly tried to win the war of media reaction via organisations like CompTIA, the Computing Technology Industry Association and ACT (the Association for Competitive Technology) which both intervened in court on its side.

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CompTIA anti-trust counsel Lars Liebler said: “Today’s decision by the Court of First Instance represents a significant blow to free enterprise in Europe. Rather than supporting Europe as the innovation capital of the world, the commission’s policies unchecked may turn the EU into the litigation capital of the world. This decision encourages competitors to bring legal action against each other rather than compete aggressively in the marketplace.”

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ACT president Jonathan Zuck said in a first reaction to the judgment: “The commission just got a treat from the court, but SMEs and consumers will actually foot the bill. Microsoft did not win today, but it is European software developers and consumers that really lost. While there still may be a silver lining, it will take several hours and days to get a true assessment of the implications for SMEs. The court does seem to acknowledge the need for Microsoft to protect its intellectual property.”

On the other side, Thomas Vinje, spokesman for ECIS, the European Committee for Interoperable Systems, was surprisingly mild and also observed that it was time for Microsoft to stop fooling around and start providing the interoperability information required by the judgement. That’s been my opinion all along and now Microsoft gets to do it under the suspicious eye of angry schoolmarm Neelie Kroes who is just itching to find more fault and to apply another ruler across the knuckles.