Microsoft wins small victory in European Court

BRUSSELS — A European Union court Wednesday largely upheld a billion-dollar penalty against Microsoft, a decision that could mark the end of an era in antitrust law in which regulators used big fines to bring technology giants to heel.

The General Court, the second highest in the Union, handed a small victory to Microsoft by reducing the fine by nearly $50 million, to $1.1 billion, finding that the European Commission had miscalculated the amount.

But the court rejected a plea by Microsoft to annul the fine, which was imposed in 2008 as part of a decadelong battle over the way Microsoft used its Windows computer-operating system to crush competition.

The ruling "essentially upholds the commission's decision imposing a periodic penalty payment on Microsoft," the court said, but it decided that it was "necessary to alter the amount of the periodic penalty payment."

The penalty was a record at the time, and Microsoft was the first and only company that the commission had fined for disobeying its orders in an antitrust case.

But that is a road the commission would prefer not to go down again in cases under way against Google and other technology giants.

Last month, the EU competition commissioner, Joaquin Almunia, said Google might have abused its dominance in Internet search by promoting its own businesses at the expense of competitors. Almunia has also told Google to propose changes by early next month or face formal charges.

But in a marked shift in tone and tactics in a European antitrust case, Google and Almunia have signaled that they would prefer a negotiated settlement to confrontation.

Robin Koch, a Microsoft spokesman, declined to comment Wednesday about whether the company would make a final appeal to the Union's highest court, the European Court of Justice.

"Although the General Court slightly reduced the fine, we are disappointed with the court's ruling," Koch said. He also underlined that Microsoft had "entered into a broad understanding with the commission that resolved its competition law concerns" in 2009.

Neelie Kroes, the former EU commissioner for competition, imposed the fine when the company failed to comply with her order to provide other companies with enough information to work with its operating system.

Kroes took that step after finding that Microsoft had charged unreasonable prices for access to vital information to communicate with powerful server computers in a violation of a previous decision against the company in 2004.

Wednesday, the court upheld the commission's finding that Microsoft blocked fair access for competitors. But the court reduced the penalty marginally as the commission had failed to take into proper account terms concerning the timing of distribution of certain products by open source developers.

Microsoft also paid fines of 497 million euros and 281 million euros for related offenses, bringing the total to 1.7 billion euros during its battle with European regulators.

By JAMES KANTER The New York Times

By JAMES KANTER
The New York Times