Last updated: May 24, 2011 9:23 pm

Microsoft in ‘final’ antitrust fray with Brussels

Lawyers for Microsoft were facing off against the European Commission on Tuesday in what looks likely to be the final tussle resulting from the battle over antitrust issues in Europe which have ensnared the software group for more than a decade.

Most of the issues between the US company and competition regulators in Brussels were settled at the end of 2009.

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But the company has continued to pursue an outstanding appeal in one of the European Union’s top courts over the right of the Commission to impose certain penalties during the lengthy legal struggle.

The fine at issue is the €899m ($1.2bn) which was levied on Microsoft by the European Commission for non-compliance with its original decision, several years earlier, that the software company had breached EU antitrust rules (for which the company was fined €497m) and abused a dominant market position in PC computer operating systems.

The company became the first in the history of European Union competition policy to be fined for non-compliance with a Brussels antitrust decision – and the combined amount of the two fines remains the largest issued penalty.

Microsoft, however, has consistently argued that it was given insufficient guidance by the Commission to allow it to rectify the situation satisfactorily after the first fine, and avoid the second penalty.

Its lawyers told the Luxembourg-based General Court – part of the European Court of Justice – on Tuesday that the second fine was undeserved, and the sums levied were excessive. They claimed that, if the Commission had been more explicit in its original decision, the problem would not have occurred.

Lawyers for the European Commission, however, defended the watchdog’s stance, while more than half a dozen other groups – including some of Microsoft’s biggest commercial rivals, such as IBM – also intervened in the case.

Although the fine at issue is very large, the case will be watched most closely because of its implications for future competition policy, rather than the actual financial implications for Microsoft.

Depending on what the court decides, it may shape the way in which Brussels has to approach certain antitrust decisions in the future.

Oral hearings at the Luxembourg courts are relatively short and most of the arguments are dealt with on paper.

The court is unlikely to reach its decision for months, and could possibly take as a long as a year.

A further appeal to the European Court of Justice itself could be possible but only on outstanding points of law.

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