Microsoft: EC Fine Is Not Fine

Microsoft said today that it would appeal the latest fine — $1.35 billion — from the European Commission (EC) in its long-running contretemps over abuse of its monopoly position in the European Union (EU).

The fine was the last of three that the EC — the EU’s executive branch — levied on Microsoft over a 2004 ruling that it had used its market dominance to block purveyors of competing media players as well competitors in the workgroup operating system arena.

“Today Microsoft filed an application with the Court of First Instance in Luxembourg to annul the Commission [EC] decision of February 27, which imposed a fine of 899 million Euros against Microsoft,” company legal spokesperson Jack Evans said in a statement e-mailed to

Microsoft received this latest fine, valued at roughly $1.35 billion, as penalty for Microsoft having dragged its heels in disclosing technical information to competitors ordered by the EC — from June 2006 until Microsoft agreed to settle with the EC in October 2007.

“We are filing this appeal in a constructive effort to seek clarity from the Court,” Evans added.

Microsoft previously paid the EC roughly $613 million in fines in the original abuse of market dominance case. It later was fined an additional $357 million for dragging its feet up until June 2006. The latest fine covers the period from then until Microsoft agreed to settle last fall.

The company has not had much luck swaying the EU’s Court of First Instance (CFI), which is very roughly similar to an appeals court in the U.S. It had appealed the EC’s original 2004 decision to the CFI, which ruled entirely in the EC’s favor in September.

Rather than appeal the CFI’s ruling to the European Court of Justice, the highest court in the EU, however, Microsoft backed down in October and agreed to settle. The company has since done what it says is its best to comply with the EC’s 2004 ruling – and the EC has agreed that Microsoft has complied with its requirement that it provide the necessary technical documentation for its products.

Still, that hasn’t kept the company out of the EC’s frying pan. Earlier this year, the EC launched two more probes of the company’s behavior in European markets, including the longstanding issue of bundling its Internet Explorer browser with Windows.

Those investigations and a reported probe of Microsoft’s behavior while trying to influence the outcome of the International Organization for Standardization’s certification process for its Office Open XML file formats are separate from this fine and the earlier case.

Interestingly, the EC’s rationale for fining Microsoft over its intransigence in providing the technical documentation is very similar to the reasoning applied by U.S. Federal District Court Judge Colleen Kollar-Kotelly in January when she extended U.S. oversight of Microsoft’s antitrust settlement for an additional two years.

Evans said the company had no further comment on its decision to appeal.

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