Microsoft Won’t Appeal CFI Unbundling Ruling

Microsoft said Monday that it would not appeal a recent ruling by the European Court of First Instance that forces it to comply with antitrust penalties such as unbundling Media Player from Windows.

A European edition of Windows without Media Player is expected in the coming weeks.

The decision comes as Microsoft continues to pursue its larger appeal of antitrust penalties imposed by the European Commission last March.

The December 22nd ruling by Europe’s Court of First Instance (CFI) forces Microsoft to remove Media Player from its Windows OS and allow more licensing access to its server software protocols, which were part of the EC’s penalties.

In a statement, the company said rather than seeking to suspend the commission’s remedies, Microsoft’s focus now is on working constructively with the EC on their full and prompt implementation.

To that end, the company continued, Microsoft said it has made available licensing information for communications protocols (the interoperability remedy) and has made available the first versions of Windows without media functionality to computer manufacturers (the media player remedy). And it said the European edition of Windows would be available to retailers and other channels in the coming weeks.

“It is important to note that although we will not appeal the December 22 Court ruling, we will continue our appeal on the merits of the Commission’s decision,” Microsoft said in a statement. “We expect to learn later this year when the Court will hold a hearing on our appeal. We remain very optimistic as we move forward in this process, and are encouraged that the December court order noted that a number of Microsoft’s arguments could provide a basis for overturning the EC’s decision.”

As previously reported by in December, Microsoft has retained a group of attorneys in Brussels whose only job is to “spin” the CFI’s ruling into more positive light for Microsoft, according to a source familiar with the situation. “That’s fair enough,” the source said at the time. “That’s the nature of the game.”

However, a Microsoft spokesperson said the company works with a number of lawyers in Brussels, where its main legal team continues to work on the case and had no comment about any attorneys retained separately to talk down or up any potential legal precedents.

The court is expected to render its full decision on the EC’s antitrust ruling later this year when it holds a hearing on Microsoft’s appeal.

Last year, the European Commission fined Microsoft a record $613 million (497.2 million euro) after it found the company abused its “virtual monopoly” with its Windows operating system and broke European antitrust laws governing competition. It ordered Microsoft to strip its media player from the Windows operating system within 90 days, and to allow more access to its APIs for software companies within 120 days. Microsoft has already paid the fine.

As part of its request to stay the penalties while it appealed the commission’s ruling, Microsoft had argued the decision would “cause serious injury to the valuable Microsoft and Windows trademarks because Microsoft would be required to sell a downgraded product inconsistent with its basic design concept.”

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