Microsoft blasts EU antitrust fine in appeals hearing

In criticizing the 899 million euro fine, Microsoft's attorney argues that the EU should have been clearer about the rates it expected the company to charge.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read

Calling it "excessive," Microsoft criticized in an appeals hearing today the 899 million euro fine imposed three years ago by European Union antitrust regulators, according to Reuters.

The fine, equivalent to $1.35 billion in 2008 and $1.27 billion today, penalized Microsoft for failing to comply with sanctions in a case involving the information it provides to other companies to allow their products to work with Microsoft software. The fine specifically addresses the rates that Microsoft charges to license its interoperability protocols and patents to third parties.

At the time, the fine was the largest ever imposed by the EU against a single company, and Microsoft became the first company ever fined by the European regulators over noncompliance. In criticizing the fine, Microsoft's attorney argued that the EU should have been clearer about the rates it expected the company to charge.

Calling the fine "most undeserved," Microsoft attorney Jean Francois Bellis told the General Court that "this case would not have arisen if the [European] Commission had been as explicit with respect to rates which it wanted Microsoft to charge as it had been with all other terms of licensing proposed by Microsoft," according to Reuters.

In a statement sent to CNET, Microsoft representative Jesse Verstraete explained the nature of the appeal:

"The fine related to the price Microsoft had proposed for one of several forms of licenses for the technology Microsoft was required to make available by the Commission's 2004 decision. This appeal is limited to this one narrow issue. Microsoft has been working in full cooperation with the Commission."

The appeals court generally takes about six months to a year before delivering a verdict, Reuters reported, while noting that the court typically is reluctant to overrule the decisions of the European Commission.

Regardless of the outcome of today's hearing, at least one legal expert believes the appeals process may ultimately provide some benefit.

"Microsoft is not the only firm to complain about procedural uncertainties in the EU competition law enforcement process," Keith Hylton, a law professor at Boston University, said in an e-mail sent to CNET.

"The biggest problem is that the EU courts tend to defer to the EC (the enforcement agency) in monopolization cases," Hylton continued. "In contrast, the American courts do not defer to American enforcement agencies. By challenging the fine and attempting to force the EU to explain its basis and set some rules going forward, Microsoft may provide a benefit for other firms that will be targeted by the EC in the future."

Updated at 9:25 a.m. PT with comments from Microsoft and Keith Hylton.