Microsoft appeals European Commission's antitrust ruling

Microsoft has filed its long-awaited appeal against the European Commission's antitrust decision, the company announced yesterday.

However, it will wait a further two to three weeks before asking for the Commission's demands to be suspended until the resolution of the case. The suspension request is likely to be decided over the next few months, but the case as a whole may take five or six years to decide.

The dispute is one of the most high-profile cases of Mr Mario Monti's tenure as Competition Commissioner and pits the US software giant against both the Commission and EU national governments, which have backed Brussels.

By contrast, the US Department of Justice has said the Commission has gone too far.

The Commission ruled Microsoft has used its market power to shut out competitors from adjacent markets such as servers and media players. It wants the company to disclose more information and offer a version of Windows without its Media Player program, as well as paying a €497 million fine.

Microsoft, which filed its appeal to the Luxembourg-based Court of First Instance on Monday, replied that Brussels' fears were unfounded and the demands would expropriate its intellectual property and deter innovation.

"The legal standards set by the Commission's decision significantly alter incentives for research and development that are important to global economic growth," the company said yesterday.

The company said the Commission has asked it to reveal protocols that were not even requested by Sun Microsystems, the complainant in the case, in the 1998 set of demands that set off the antitrust fight.

Microsoft added that the Commission's media player demands were also unreasonable, because there is no market for operating systems without media players.

But the Commission countered that it was entitled to take account of changing circumstances in such a long-running case.

Brussels also believes Microsoft rivals such as RealNetworks should be allowed to pay computer manufacturers to use their media players, but that real competition is impossible if Microsoft's own Media Player is already installed.

"I don't know how Microsoft is going to show how the bundling [of Media Player] part of the decision is outside settled law," said Mr Dave Stewart, RealNetworks deputy general counsel.

Many lawyers believe that Microsoft may have a better chance in convincing the court that the Commission had violated its intellectual property rights by ordering it to disclose interface information.

- (Financial Times Service)