EU Judges Asked to Toss Out Microsoft Fine

Microsoft Chief Executive Officer Steve Ballmer speaks during his keynote adress as part of the MIX 06 conference in Paris, Thursday, April 27, 2006. The MIX 06 is a conference for web developers and designers and explores how to build a more interactive Web. (AP Photo/Christophe Ena) (Christophe Ena - AP)

LUXEMBOURG -- The record antitrust fine levied against Microsoft Corp. by the European Commission should be tossed out, or at least greatly reduced, because the punishment outweighed the infraction, company lawyers said Friday.

Commission lawyers said that to throw out the fine, or even reduce it, would impede regulators' ability to keep a level playing field in the world of business.

"What is left to provide deterrents?" commission lawyer Fernando Castillo de la Torre said, adding the amount of the fine was "proportionate to the gravity of the infringement."

In 2004, the commission ruled that the world's largest software company had to pay a 497 million euro ($613 million) fine, share information with rivals and produce a version of its Windows operating system without Media Player software.

Speaking before the 13-judge panel of the Court of First Instance on Friday, Microsoft lawyer Ian Forrester said the amount was far too much because the company did not knowingly take advantage of its dominance.

"No fine should have been imposed because Microsoft committed no wrong," he told the judges in what was likely the last day of a five-day hearing about the ruling that the company had abused its position in the operating systems market.

Instead, he said the commission decided to levy the fine to draw media interest.

"The largest fine in history would make for large headlines," he said, adding that the court should annul it completely or, at the very least, "significantly reduce it."

The previous record fine issued by the EU was 462 million euros against Swiss pharmaceutical company Roche Holding AG in 2001 for price-fixing in the vitamin pills market.

While a court decision is not due for months, a ruling backing the commission could force Microsoft to change the way it does business in the future and endorse the EU's ability to hold back aggressive corporate behavior.

Earlier in the hearing, Forrester told the judges that the 2004 ruling effectively meant that the company was "being told to give a worldwide license in perpetuity" to its rivals that included its trade secrets and copyrights.

Doing that, he added in his summation Friday, would let the company's rivals create a similar product and take away from its competitiveness.