Microsoft loses huge fine appeal

A court has upheld most of a massive fine levied against Microsoft by the European Commission's competition watchdog, closing a case against the software giant that began in 1998.

The General Court of the European Union rejected Microsoft's appeal against the fine levied in 2008, but did trim it by 39 million euros to 860 million euros (£687 million). Counting two earlier fines, the case has wound up costing Microsoft a grand total of 1.64 billion euros (£1.3 billion).

That is the most ever resulting from a single anti competition case in Europe.

The court in Luxembourg said its decision "essentially upholds the Commission's decision and rejects all the arguments put forward by Microsoft in support of annulment."

The fine is a "penalty for non-compliance" with the watchdog's 2004 order for Microsoft to make computer programming code available that would allow competitors' products to interface properly with Microsoft's server software.

Microsoft did so, but at a price the Commission said was so exorbitant it amounted to not complying.

The court upheld that finding, but said Microsoft deserved a small break because of a letter the Commission sent in 2005 saying the company did not have to freely distribute code that was not its own and was available elsewhere. That letter gave Microsoft some room to think it was okay to continue acting the way it had until 2004, and should have been "taken into account in determining the gravity of the conduct found to be unlawful," the written decision said.

"Although the General Court slightly reduced the fine, we are disappointed with the Court's ruling," Microsoft said.

The company has already booked provisions for the fines and penalties and after the ruling it has no active outstanding quarrels with the European watchdog.

In the 2009 deal, Microsoft ended an investigation into allegedly abusive practices for bundling its Internet Explorer web browser along with its operating systems. Microsoft agreed to instead offer customers a range of browsers to choose from.

In a sign of the times, it is Microsoft that turned to the watchdog in 2012, asking it to investigate Google for anti-competitive practices. Microsoft alleged that Google was demanding unreasonable fees to licence its technologies and asking courts to pull Microsoft products that use the patents from shelves if they do not pay up. Google shot back with a similar request for the Commission to again investigate Microsoft last month.