The historical basis for this is the landmark March 2004 decision when the European Commission found that Microsoft was abusing its market leading position in the desktop software market with the intention of stifling its competition. They fined Microsoft 497m Euros, equivalent to US$613m or £344m, ordered the company to change how it sells its Media Player software and to provide its rivals with enough information on its Windows operating system's programming code so that other companies could develop competitive, well integrating, software.
Microsoft's week-long anti competition appeal hearing was heard by the thirteen judges of the European Union's Court of First Instance in April '06, but they may not deliver a verdict until early 2007. When a verdict is eventually produced Microsoft would still be able to make a further appeal to the European Court of Justice. However it seems that the European Commission has lost patience with Microsoft's non-compliance with the original 2004 ruling. Brussels is currently preparing a draft ruling that will be presented to national competition authorities on Monday 3 July and an official ruling is expected on the 12th of July. The Commission is expected to rule that Microsoft has failed to fully implement its 2004 anti-trust decision and impose a fine of two million euros, equivalent to $2.5M or £1.4M, a day on Microsoft.
In December 2005 The Commission informed the software giant that it had failed to comply with the original 2004 ruling. At this time the Commission warned Microsoft it would face fines of up to two million euros a day if it did not comply immediately. On Monday the 26th of June Microsoft said it had begun to provide the information Brussels had requested but the commission has indicated that the company acted too late. As Microsoft has taken a further six months to begin handing over information many believe the commission will take the view that the firm has been acting illegally since the warning.
Microsoft's statement said they had been working hard to meet the Commission's demands.
"Microsoft has complied fully with every instruction given by the Commission and any fine would be unjustified and unnecessary," was the official line. Microsoft also argued that the EU's ruling would stifle innovation, stating: "What the commission is seeking is a dramatic change in Microsoft's business model".
Essentially, Microsoft's lawyers claim that the European Commission is forcing it to divulge valuable trade secrets and argue that its fine should be rescinded. They also argue that it should not have to produce a version of its Windows operating system without the Media Player software and are against the stipulation that Microsoft should share information about Windows with rival software companies. The whole ongoing saga threatens to overshadow Microsoft's new Vista operating system and Office 2007 launch originally scheduled for early next year.
