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EUROPEAN COMMISSION RULES AGAINST MICROSOFT
COMPANY PLANS TO APPEAL FINE AND UNPRECEDENTED NEW REGULATIONS
Today the European Commission (EC) issued its ruling against Microsoft in the European antitrust case. The EC fined Microsoft $613 million and ordered the company to sell a version of Windows in Europe with Windows Media Player software code stripped out. This ruling raises the threat that the EC will regulate how Microsoft integrates any new feature into Windows. Microsoft has also been ordered to provide valuable proprietary software code and technical information to competing companies.
Microsoft is still examining the details of the EC’s decision but plans to appeal this ruling to Europe’s Court of First Instance.
Steve Ballmer, chief executive officer of Microsoft, said that in spite of today’s ruling, the company “will continue to invest in new technology breakthroughs, and we will continue to work to bring our innovations to our partners and customers.”
"We have acted responsibly while seeking to build the best products we can to meet the needs of our customers," said Brad Smith, senior vice president and general counsel of Microsoft. "We believe that the Commission's decision would actually reduce consumer choice and hurt European software developers."
Throughout the investigation, Microsoft sought a resolution to the EC’s objections that does not impair the company’s ability to improve Windows and develop new technology. Last week, Microsoft and the EC agreed on issues that addressed the Commissions concerns for this case. However, the EC made additional demands that would have impaired Microsoft’s ability to develop new technologies and make them available to consumers in Europe.
EC ANTITRUST RULING CONFLICTS WITH TERMS OF U.S. SETTLEMENT
In 2001, Microsoft reached a settlement in the U.S. antitrust case that places broad restrictions on the company. That settlement, however, does not impair Microsoft’s ability to improve the Windows operating system. The U.S. District Court approved the terms of the settlement in November 2002. The supervising federal judge said in January of this year that the settlement was working “as envisioned.”
We believe that the terms of the settlement in the U.S. case address the issues raised by the EC. However, the EC is now seeking to impose regulations on the company that fundamentally affect our ability to bring innovative new products into the marketplace in Europe. In fact, the EC is levying its fine against Microsoft for activities expressly permitted under the settlement reached in the U.S. case.
We are confident that the European courts will support the rights of European consumers to have full access to new, leading-edge technologies.
EUROPEAN DISPUTE UNDERSCORES NEED FOR COOPERATIVE ANTITRUST ENFORCEMENT
Moving forward, we hope to find a solution that enables us to serve consumers, invest in innovation and fully compete in the European marketplace. Ideally, antitrust regulations against the company would apply globally and be uniform in all markets. Because these current antitrust complaints in Europe have come from other U.S.-based companies and the U.S. courts have already ruled here at home, we believe that the outcome of the European case should not conflict with the U.S. case. Uniform antitrust enforcement would not only benefit Microsoft, but also other companies that do business around the world.
STAY INFORMED AND STAY INVOLVED
We encourage you to contact your elected officials about this issue or any other issue of concern to you. To e-mail your elected officials, please visit http://www.freetoinnovate.com.
For more news about Microsoft and technology policy issues, visit the Freedom to Innovate Web site at www.microsoft.com/freedomtoinnovate.
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