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Press Release

European Court Forces Microsoft to Alter Its Products

FreedomWorks is dismayed with the European Court of First Instance’s rejection of Microsoft’s request to suspend sanctions until the appeal of the European Commission’s March 2004 decision is heard by the court. In denying the request, President of European Court of First Instance, Judge Bo Vesterdorf, will force Microsoft to provide customers in the European Union a stripped-down version of its operating system that does not include a media player, as well as providing competitors access to portions of its code to enhance interoperability. The ruling is at odds with U.S. antitrust determinations and adds a degree of uncertainty to the dynamic high-tech market. Just as disturbing, the decision may establish a precedent for future aggressive antitrust policies against American companies in the European Union.

“The decision by Judge Vesterdorf is as puzzling as it is damaging,” said FreedomWorks Vice President for Research Wayne Brough. “The market for software is competitive and fast-paced. Consumers will not be served well by policies that generate uncertainty. At the same time, the judge acknowledged the fact that there are merits to Microsoft’s appeal of the European Commission’s decision, which suggests that it would have been better to defer policies that fundamentally alter the market for software until after the appeal was heard.”

Today’s ruling does not address the Microsoft’s appeal, but it forces Microsoft to begin to implement the penalties from the March decision before the appeal is heard. A hearing on the appeal is expected next fall, and a decision is not expected until 2006, and there is the potential for appealing that decision as well. “All this means a continued question mark over the high-tech market in Europe and the possibility of years of litigation, which is not good for consumers or the software industry,” said Wayne Brough. “It is outrageous that the court rejected the request by Microsoft, an American company whose actions are still unproved by the European courts.”

“It is important to put this issue in perspective. In both the United States and Europe, the case against Microsoft has been brought by rival companies seeking to gain market share through the courts rather than competition. Consumer harm has not been the issue,” noted Brough. “Now, the EU appears to be centrally planning the software industry, determining what software designers can and cannot do with their own products. The technology industry and consumers are the ones who should be deciding what software should look like, not government bureaucrats making up the rules as they go.”

Wayne Brough is available for further media comment at (202) 783-3870.