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12 May 2008, 15:37

Microsoft appeals record EC fine

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Microsoft announced on Friday it has appealed the record €899m (£709m) fine imposed on the company by the European Commission (EC) in February, indicating the company is not yet prepared to reconcile itself to the Commission's interoperability demands.

The company filed an application for appeal with the Court of First Instance in Luxembourg to annul the Commission's fine. "We are filing this appeal in a constructive effort to seek clarity from the court," Microsoft said in a statement. "We will not be saying anything further." The EC said in a statement it is "confident that the decision to impose the fine is legally sound".

The appeal follows a February announcement by Microsoft of a number of interoperability initiatives designed to allow more interoperability between Microsoft's products and those of competitors. The initiatives were greeted with scepticism by the EC.

In 2004 the EC fined Microsoft €497m and made three demands intended to correct Microsoft's predominance in the desktop operating system market, a predominance the EC judged had been abused by Microsoft. The current dispute is over the last and most technically critical of these three demands, related to the way patents and interoperability protocols are licensed to competitors.

At the EC's behest, Microsoft makes such information available to competitors, but on terms that the EC argues are unusable by open source software projects. Microsoft argues that the licensing terms demanded by the EC violate its intellectual property rights.

In February Microsoft announced a number of new interoperability measures, including publishing "all" details of application programming interfaces (APIs) for its most widely used products, listing software patents that cover interoperability and promising not to sue non-commercial implementations of its technologies.

However, the new initiatives are still based on licensing terms that are subject to royalty payments, making them incompatible with open source projects, developers have said. At the time, the Commission said it would welcome any moves toward genuine interoperability, but noted that Microsoft had made several similar statements in the past.

So far the EC has fined Microsoft a total of €1.68bn.

(Matthew Broersma)


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