The European Commission fined Microsoft a $1.1 billion dollars for abusing its dominant position in the operating system market. Microsoft challenged the fine, but the EU General Court upheld it, requiring the software giant to license on reasonable terms interoperability data needed by firms writing programs that would be compatible with Windows. The decision bolsters the Commission’s ability to regulate large electronics companies in industries relying on standards.
Microsoft’s principal complaint with the fine was that the concept of a fair rate was uncertain and vague. The General Court disagreed, finding that the 2004 pricing principles that the Commission and Microsoft agreed upon provided all the information that the company needed to determine whether its interoperability information rates were reasonable. Moreover, the court placed a burden on Microsoft to offer reasonable rates in the first instance, not after a dispute resolution process. Such a process could not restore the lost opportunity for competition while the rates were too high. “That finding,” the court explained, “is particularly relevant in the context of markets which are evolving rapidly and in which the development of products such as those at issue is dependent on investments where the fixed cost is very high and must be calculable in advance by interested parties.”