09.24.2007 08:46 AM
Microsoft loses European Union appeal

The long saga of Microsoft’s European legal troubles came to a conclusion last week when the software giant lost its last major appeal. Microsoft has been ordered to sell Windows without its Media Player, share code with rivals and pay a record $613 million fine.

Outside of being a major setback for Microsoft, legal and computing experts said the court decision could have a major impact on other companies that dominate segments of the media and communications markets. These include Apple with music downloads, Intel with computer chips and QUALCOMM with mobile phones.

“The decision is a strong endorsement for what in the United States would be considered aggressive policy on dominant firms,” Andrew I. Gavil, a law professor at Howard University told the “New York Times.” “And that’s going to continue to play out in other kinds of cases.”

The European Court of First Instance found that Microsoft had abused its market power by adding a digital media player to Windows, undercutting the early leader, Real Networks. It also ordered the company to obey a March 2004 European Commission order to share confidential computer code with competitors.

The precedent-setting ruling poses a threat to Microsoft’s traditional way of doing business by bundling new features and products into its operating system. The company’s allies told the “Times” that the decision would have a chilling effect on the business strategies of many global technology companies.

Because the Internet runs on server software, industry analysts said the European ruling’s widest impact may be on Microsoft’s ability to guard some of its intellectual property in software for servers. The order applies only to Europe, but Microsoft may have a difficult time containing the impact to the European market only.

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