CFI upholds Microsoft fine

The European Union’s Court of First Instance (CFI) has backed Microsoft’s record €497m (£338m) fine from 2004 in a landmark antitrust decision that is a boon to Europe’s competition regulator.

The 248-page judgment, which upheld most of the original decision by the European Commission (EC), could be a final chapter in one of Europe’s most high-profile competition cases nine years after complaints of abuse of dominant position were first made against Microsoft by Allen & Overy client Sun Microsystems.

But the CFI found for Microsoft on whether the software giant should pay for a trustee to monitor the company’s compliance with competition remedies.

Although the CFI’s decision on the facts is final, the company or the EC can still appeal today’s judgment at Europe’s highest court, the European Court of Justice on matters of law.

Microsoft now also faces the prospect of a further investigation by the EC. Moreover, it was ordered to pay its own costs and those of rivals that backed the EC.

In 2005 Brussels-headquartered competition boutique Van Bael & Bellis launched the appeal on behalf of Microsoft after the EC found it guilty of abusing its dominant position in the personal computer desktop market because it was bundling together its Windows operating system and Windows Media Player. As well as the then-record fine, the EC ordered Microsoft to offer a version of Windows without Media Player.

In 2006 the EC penalised Microsoft €280.5m (£191m) for not complying with its 2004 fine, the lump sum equivalent to daily fines of €1.5m (£1.03m) since 14 December 2005, the date of the Commission’s final compliance warning.

A raft of lawyers was drafted in on the nine-year battle. Also advising Microsoft on its appeal was White & Case’s competition partner Ian Forrester QC.

Covington & Burling’s head of EU competition David Hull was lead counsel to Microsoft on trying to get its 2006 non-compliance fine annulled.

Brick Court Chambers’ James Flynn QC advised the Computer and Communication Industry Association as an intervener supporting the EC while fellow member Kelyn Bacon represented the Association for Competitive Technology as an intervener for Microsoft.