Microsoft Withdraws EU Antitrust Appeals

Microsoft Corp. has dropped two outstanding appeals of European antitrust rulings, following the deal struck with the European Commission at the beginning of this week, the company said in a statement Wednesday.

Last year Microsoft appealed the €280.5 million fine it incurred for failing to provide interoperability protocols to rivals, as required in the landmark 2004 European Commission antitrust ruling. The appeal was filed with the Court of First Instance (CFI).

It also appealed against the Commission's demands that it make the protocols available to open-source software developers.

However, in light of the agreement reached between Microsoft CEO Steve Ballmer and Competition Commissioner Neelie Kroes on

Monday, these appeals became redundant.

Less than a month after suffering a crushing defeat in its original appeal of the 2004 ruling, Microsoft said Monday it would finally comply with that ruling. All the required interoperability protocols would be made available to the open-source community and the price for them would be slashed, Microsoft said.

The two outstanding appeals to the CFI were no longer necessary, said Erich Andersen, European General Counsel for Microsoft.

"We believe it's important at this stage to focus all of our energies on complying with our legal obligations and strengthening our constructive relationship with the European Commission," he said in the statement.

The Commission welcomed the withdrawal of the appeals, spokesman Jonathan Todd said.

The only loose end remaining in the nine-year long antitrust battle between the world's biggest software maker and Europe's top competition authority is the calculation of fines still to be paid for Microsoft's three and a half years of non-compliance.

The a 280.5 million fine imposed in July last year was the sum of daily fines of €2 million for not honoring the ruling to that date. When

that fine was announced, Kroes said the Commission would increase the daily fine to €3 million.

Microsoft was officially deemed in compliance with the 2004 ruling on Monday, over 14 months after the last fine was imposed. A rough calculation would put the new fine at close to €1 billion. When added to the €280.5 million fine imposed last year and the original €497 million fine imposed in 2004 the total of antitrust fines in the case is about €1.8 billion.

The Commission will announce the final tally toward the end of this year, Todd said.