In European Court, a Small Victory for Microsoft - New York Times

BRUSSELS â€" A European Union court on Wednesday largely upheld a billion-dollar penalty against , a decision that could mark the end of an era in antitrust law in which regulators used big fines to bring technology giants to heel.

The General Court, the second highest in the Union, handed a small victory to Microsoft by reducing the fine by €39 million, to €860 million, or $1.1 billion, finding that the had miscalculated the amount.

But the court rejected a plea by Microsoft to annul the fine, which was imposed in 2008 as part of a decade-long battle over the way Microsoft used its Windows computer operating system to crush competition.

The ruling “essentially upholds the commission’s decision imposing a periodic penalty payment on Microsoft,” the court said, but it decided that it was “necessary to alter the amount of the periodic penalty payment.”

The penalty was a record at the time, and Microsoft was the first and only company that the commission had fined for disobeying its orders in an antitrust case.

But that is a road the commission would prefer not to go down again in cases under way against Google and other technology giants.

Last month, the E.U. competition commissioner, Joaquín Almunia, said Google might have abused its dominance in Internet search by promoting its own businesses at the expense of competitors.

Mr. Almunia has also told Google to propose changes by early next month or face formal charges.

But in a marked shift in tone and tactics in a European antitrust case, Google and Mr. Almunia have signaled that they would prefer a negotiated settlement to confrontation.

For Google, the goal is to avoid a prolonged tussle with regulators in Europe that could restrict its business plans.

Mr. Almunia has said he prefers reaching settlements in cases that, even if they result in victories in court, may not result in effective remedies in the fast-moving technology sector.

Microsoft is now among several companies and industries that have complained to the commission about Google for its behavior in online search and advertising, and for charging too much for patents on mobile devices like smartphones.

Robin Koch, a Microsoft spokesman, declined to comment Wednesday about whether the company would make a final appeal to the Union’s highest court, the European Court of Justice.

“Although the General Court slightly reduced the fine, we are disappointed with the court’s ruling,” Mr. Koch said. He also underlined that Microsoft had “entered into a broad understanding with the commission that resolved its competition law concerns” in 2009.

, the former E.U. commissioner for competition, imposed the fine when the company failed to comply with her order to provide other companies with enough information to work with its operating system.

Ms. Kroes took that step after finding that Microsoft had charged unreasonable prices for access to vital information to communicate with powerful server computers in a violation of a previous decision against the company in 2004.

On Wednesday, the court upheld the commission’s finding that Microsoft blocked fair access for competitors. But the court reduced the penalty marginally as the commission had failed to take into proper account terms concerning the timing of distribution of certain products by open source developers.

Microsoft also paid fines of €497 million and €281 million for related offenses, bringing the total to €1.7 billion during its battle with European regulators.

Unlike in the United States, antitrust regulators in Europe can fine companies and force them to change their business practices without a judge’s permission. Companies can appeal such rulings, but litigating those cases often takes years.

In 2009, Intel was fined €1.1 billion, the largest single fine levied by the European antitrust authorities, for abusing its dominance in the computer chip market. Intel has appealed that ruling, saying the commission did not follow procedure.

A hearing is scheduled next month, and a judgment could come late this year.

If Google eventually receives formal charges, it could be fined as much as 10 percent of its annual worldwide revenue, which reached nearly $38 billion last year, and open to requirements to change its business practices to conform to any E.U. law it was found to violate before being allowed to appeal to the General Court.

On Wednesday, in a veiled warning to companies that failed to heed his call to settle, Mr. Almunia took an opportunity to say the ruling was a vindication of his predecessor’s crackdown on Microsoft, and of her decision to impose large fines on the company.

“The judgment confirms that the imposition of such penalty payments remains an important tool at the commission’s disposal,” Mr. Almunia said.