Source AP ©

Microsoft case boosts EU's lead role in regulating leading companies

The lost case of Microsoft means that U.S.-based multinationals will continue to face tougher competition rules in Europe than at home, legal experts said.

Many U.S. companies hoped that the EU's Court of First Instance would take steps to restrain the European Commission. Instead, Microsoft on Monday lost its appeal of a European antitrust order that obliges the technology giant to pay a $613 million (EUR442 million) fine, share communications code with rivals and sell a copy of Windows without Media Player. The EU Court agreed Microsoft was guilty of monopoly abuse in trying to muscle into server software.

This likely cements Europe's role as the lead international regulator of dominant companies, said M.J. Moltenbray, a partner at Freshfields Bruckhaus Deringer LLP.

"In global markets, the antitrust policy that matters is the most restrictive one," she said.

The ruling could also lead to tougher legal regimes in developing countries such as China and India, which are just beginning to develop their antitrust laws, Moltenbray said. Many developing countries may model their laws after the EU's more restrictive regime, Moltenbray said.

The international scope of the EU's role was reflected in the Microsoft case in that it was a U.S.-based multinational, Sun Microsystems Inc., rather than a European company, that brought the initial complaint in Europe.

"Microsoft's rivals ... haven't been able to get the constraints they wanted out of U.S. courts, so they're trying to get them out of the European Union," Keith Hylton, a professor at Boston University School of Law, said Friday.

The EU court's decision is unlikely to have a direct impact on Microsoft's antitrust case in the United States, Moltenbray and Hylton said. The Justice Department's case against the software company is narrower and unlike the EU's ruling, does not bar bundling applications such as Windows Media Player.

Still, a group of states led by California is seeking to extend a consent decree reached between the Justice Department and Microsoft, which is scheduled to end in November, for five additional years. Lawyers said they expect the EU court's decision to be cited in a written request for the extension, due Oct. 15.

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