Microsoft: Sanctions are "unfortunate", "unnecessary"

Redmond (WA) - Microsoft has rejected the European Commison’s decision to fine the company $613M and remove code from its operating system. Arguing that the sanctions would benefit a small amount of competitors but harm the industry and customers, Microsoft announced to appeal the EC’s decision.

Microsoft wasted no time to announce litigation steps after the European commission had set a record fine of $613M and harsh code removal requirements on Microsoft. However, it wouldn’t be Microsoft, if the company agreed to the fine right away.

Microsoft CEO Steve Ballmer and general counsel Brad Smith laid out the strategy of the company in a conference call with journalists early Wednesday. The company feels treated unfairly and intends to appeal the decision. "We will ask the court to remove many or all sanctions the EC set today", Smith said. The firm’s first priority is to keep the Windows Media Player integrated with Windows.

"Many new PCs are shipped with competing media players. This decision helps a small number of competitors, but will harm the industry and the consumer," Smith said. Research in Europe clearly shows, that consumers request the Windows Media Player to be integrated in Windows. If upheld, the removal of the multimedia software will "cause 20 features in Windows not to function properly" and cause errors in many websites across Europe, Smith added.

Microsoft criticized the EC’s decision to neglect economical issues and decide differently than a US court in a similar case. Both cases were brought forward by "competitors", Brad said. Since they did not succeed in the US, "they chose to move across the Atlantic to have another day." In contrast to the EC, the US court found that the removal of the Windows Media Player would "stifle innovation", "harm the industry and the consumer", and "harm the whole PC ecosystem." "We understand our obligation and responsibility in the market place," Ballmer explained, "but today’s decision was unfortunate and unnecessary."

Ballmer mentioned that he and the EC were "on the verge of an agreement" last week. "We agreed on virtually all issues. Now the EC has chosen a different and much riskier course." The company does not believe it has abused its monopoly and questioned the EC’s motivations : "It took the EC five and a half years to come to this decision. If they really thought it was abuse of monopoly, they would have decided much quicker," Smith argued.

Analysts believe that the decision will have no immediate impact on customers. While Microsoft said that the decision will harm customers since users will receive less features than today, the company likely will have to think about a strategy how to communicate to its customers why it thinks it is treated unfairly by the EC. "If Microsoft cannot prove its case in a credible way, many users might be pushed to Linux even closer", said Charles King, research director at the Sageza Group.