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September 7, 2008

Sources say Microsoft nearly won EU antitrust appeal

Posted by David Hunter at 6:28 PM ET.

EU logo Just about one year ago the European Court of First Instance upheld the European Commission ruling that Microsoft had illegally abused its market power, but Stephanie Bodoni and Matthew Newma at Bloomberg News reported on Friday that it was a very close decision:

Microsoft Corp. may have made a mistake by settling antitrust charges with the European Union last year after losing an EU court ruling. The software maker didn’t know it was one vote away from winning.

Judges voted 7-6 against Microsoft on Sept. 17, 2007, according to two people with direct knowledge of the outcome. They declined to be identified because EU court votes are confidential. It should have appealed to try to end the European Commission’s case for once and for all, said Toan Tran, an analyst at Morningstar Inc. in Chicago.

Bo Vesterdorf, the former president of the Court of First Instance, said in a May speech that Microsoft should have appealed to the EU’s highest court, the European Court of Justice, to ensure more clarity on how intellectual property rights are treated. He delivered the Microsoft decision on his last day on the bench.

Hindsight is always 20-20, but the decision to appeal is largely independent of the closeness of the lower court verdict. Undoubtedly Microsoft’s legal team carefully assessed their chances of prevailing in a further appeal before throwing in the towel.

The close vote may indicate that EU courts aren’t a rubber stamp for commission decisions. Knowledge of the split may influence U.S. technology companies facing antitrust probes, such as Intel Corp. and Qualcomm Inc., in their legal battles.

I’m sure knowledge of the close vote will also give further impetus to Microsoft’s current appeal to the Court of First Instance of the huge fine the EU Commission also slapped on them.

Filed under Antitrust, General Business, Governmental Relations, Legal, Microsoft

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