Europe 2, Microsoft 0 (and PC 1, OS 145)

Case dismissed! It's IT Blogwatch, in which Microsoft gets slapped down in its bid to overturn a European antitrust ruling. Not to mention a PC that can really scale, at least when it comes to operating systems ...

Microsoft goes "Ouch!", reports the IDG News Service:

Microsoft Corp. failed today in its bid to overturn a European Commission antitrust ruling against it, when the European Union's second-highest court dismissed the company's appeal and ordered it to pay the bulk of the commission's legal expenses.

Jeremy Kirk: Remember Real?

RealNetworks Inc., maker of the RealPlayer multimedia application, dominated the market until 1999, when Microsoft started bundling its own media player with Windows. That effectively ended the ability of RealPlayer to compete with Windows Media Player on the "basic intrinsic merits of the two products," according to the appeals ruling from the Court of First Instance in Luxembourg.

In 2003, RealPlayer, which most users had to download, was only on 60% to 70% of PCs, in comparison with a 100% install rate for Media Player on Windows client PCs, the appeals ruling noted.

Anonymous MS watcher, who is probably a lawyer: No one survives the European Inquisition:

As a result, the judgments on both bundling and interoperability information stand. As does the record fine. MSFT even gets to pick up 80% of the EUC's legal costs and that of several competitive rivals - or at least rival-backed lobbying groups (EUC picks up 20% of MSFT's costs). What I haven't seen covered is whether this is likely to open the floodgates to additional litigation/financial settlements with competitors in Europe (as it did in the US following the Final Judgment).

Caveat: I haven't read the detail of the Court's decision. Supposedly, MSFT will be still be allowed to improve its products. But when the court found no technical advantage to bundling Media player the way they did, you have to wonder how high the bar will be to add anything without a major fight from a further emboldened EUC. And make no mistake, they are that ...

Additionally, chances that Office and Vista - both of which are under investigation - will now be subject to further EUC demands and or charges seems like a foregone conclusion.

How To Split An Atom: How much will that cost, exactly?

The total "bill" that Microsoft has run up when you take into account fines and the legal fees that it will be forced to pay amounts to $690 Million. It is unclear whether the company will comply with this latest ruling, but one thing is for certain that and that is that future anti-trust fights will be more difficult for Microsoft to defend again unless it manages to reverse this decision.

Larry Dignan: M$ doesn't have many options to fight this:

Microsoft can appeal on points of law, but not the facts of the case.

Microsoft General Counsel Brad Smith tread carefully, noting that the court was "objective" and that the company needed time to read the complete ruling. If Microsoft needs to change business practices it will, said Smith.

In a press conference, Smith said Microsoft was "100 percent committed to complying with the European Commission's decision." Smith added that some issues will have to be worked out. For instance, European regulators have said the prices Microsoft charges for communications protocols–1 percent of revenue of the product using it–are too high. Trade secrets are another issue that has to be weighed, said Smith.

Microsoft's Brad Smith: We're trying to change, really!

"I would note that a lot has changed since this case started in 1998. The world has changed, the industry has changed, and our company has changed. We sought to underscore that over a year ago when we published what we described as our Windows Principles, principles intended to ensure that future versions of Windows, starting with Windows Vista, would comport not only with the principles of U.S. law but with the principles that are applicable here in Europe as well.

"We've sought to be open and transparent, and we've sought to strengthen our ties with the rest of our industry. Indeed, it's notable that just last week we announced a new agreement with Sun Microsystems, and the week before that we announced a new agreement with Novell, two of the companies that started out on the other side of this case almost nine years ago.

Ars: It wasn't all bad news:

The only point that went in Microsoft's favor was the issue of the trustee. The CFI found that the Commission had "exceeded its powers in so far as it makes Microsoft responsible for all the costs associated with the monitoring trustee." It also granted the trustee too much power and failed to put a time limit on his mandate. The Commission must do much of the monitoring itself and cannot delegate to a third party powers of examination and investigation that it cannot exercise on its own behalf.

Techdirt comes in on Redmond's side:

Of course, it's still not clear how this benefits consumers in any way. It's true that Microsoft bundles its media player, but many, many people have been willing to download and use alternatives. Also, Microsoft is a lot more open than most companies in allowing competitors technology to work on its operating systems. The company has known for quite some time that its success as a platform depends on this. It's hard to see how these are problems that requires regulatory involvement when the market should suffice.

Wall Street Journal Law Blog: Don't look now, but isn't that Apple breaking out in a sweat?

The next dominator in the sights of European antitrust authorities? Apple's iTunes. Beginning Wednesday, the EC will hold antitrust hearings into the music-pricing structure for Apple's online store. In April, the commission accused Apple and four major record companies of unfair practices. The accusation centered around European consumers being charged differing amounts for iTunes songs depending on the country in which they buy them, in violation of EU antitrust laws. If the regulator finds evidence of an antitrust violation, it can fine the companies up to 10% of their annual global revenue.

Buffer overflow:

Around the Net

Around Computerworld

Previously in IT Blogwatch

And finally... How to install and boot 145 operating systems in a PC. Favorite quote: "The intention of the thread is to demonstrate booting in Linux is a simple matter."

Computerworld's Senior Online Projects Editor Ian Lamont compiled IT Blogwatch today. On Friday, regular Blogwatcher Richi Jennings will return.

Copyright © 2007 IDG Communications, Inc.

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