Microsoft complies with EC decision


BRUSSELS -- Microsoft on Monday finally conceded defeat in its battle with EU regulators when it said it would not appeal the crushing ruling by the EU's second-highest court that last month upheld the European Commission's record €497 million ($685 million) fine against the software giant.

"We will not appeal the Court of First Instance's decision to the European Court of Justice," the company said in a statement.

The court last month upheld the commission's 2004 decision that Microsoft abused its dominant market position to muscle out rivals. It said the commission, the EU's antitrust authority, was justified in ordering Microsoft to unbundle its music and video application Media Player from its Windows operating system. It also backed the commission's demand that Microsoft divulge the software protocols, or "interoperability information," to make Windows more compatible with rival systems.

Earlier Monday, the commission said Microsoft had agreed on the remaining measures concerning software protocols that had still not been settled after the 2004 decision.

While Microsoft complied relatively quickly with the commission's demand on Media Player -- issuing a European version of Windows without the application -- it had long dragged its heels on software protocols. In July 2006, the commission announced €280 million ($396 million) in new fines -- plus further daily fines -- after finding that Microsoft was defying the original ruling.

But on Monday, EU Competition Commissioner Neelie Kroes said no more fines would be imposed -- though she could not say how much, if anything, Microsoft owed the regulators.

Under the latest agreement, Microsoft said open source software developers like Linux will be able to access and use Microsoft's interoperability information. The royalties payable for this information will be slashed to a nominal one-off payment of €10,000 ($14,000). In addition, the royalties for a worldwide license will be cut to 0.4% from 6% -- less than 7% of the royalty originally claimed.

The news was a "victory for the consumer," Kroes said, adding that, "These changes in Microsoft's practices will profoundly affect software industries."