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Last Updated: Sunday, 27 June, 2004, 15:55 GMT 16:55 UK
EU suspends Microsoft sanctions
Microsoft founder Bill Gates
Microsoft has vowed to fight the EC's ruling
The European Commission has suspended sanctions against Microsoft stemming from a ruling that the group had abused its dominant market position.

The move came after the world's largest software company appealed against the decision at the EU court early in June.

The EC stressed that the move was an "interim measure" until a court had ruled on Microsoft's request. Microsoft has also asked for a long-term suspension of EU-imposed changes to the way the firm operates.

The changes ordered by the Commission include selling a version of Windows without its media player software.

Record fine

Microsoft was ordered to unbundle the software within 90 days - that deadline runs out on Monday.

The EC, in its March ruling, also hit Microsoft with a record fine of 497m euros (332m) and gave it 120 days to reveal details of its Windows software codes, so rivals could design compatible products more easily.

The remedies will not only hurt Microsoft, they will hurt many other software development companies and web site developers who have built products for the Windows platform
Horacio Gutierrez, Microsoft lawyer
But on Friday, the company appealed to the Court of the First Instance in Luxembourg, asking it to suspend the orders for as long as its case remains before the European Courts.

That could see the penalties suspended for as long as three years.

As it announced the suspension, the Commission said that "in the interest of a proper administration of justice", it was delaying the implementation of its measures "while a Microsoft application for interim measures is being considered".

But it added that the decision to put the punishment on hold was "without prejudice to Microsoft's obligation to implement the remedies" if the court decides to reject Microsoft's request.

Unfair advantage

"The Commission believes that the remedies are reasonable, balanced and necessary to restore competition in the marketplace and that there is a strong public interest in favour of implementing them without waiting for the judgement on the substance of the case," a statement added.

Microsoft has vowed to fight the Commission's finding that it had broken competition laws, arguing that the EC sanctions will stunt competition and innovation, and limit consumer choice.

Microsoft's Windows software runs on about 90% of the world's PCs.

Rivals, including Real Networks, have complained that the company was unnecessarily bundling in software with its operating system, and as a result gaining an unfair advantage.

One of the main bones of contention was Microsoft's media player - software used to play audio and video, as well as to burn CDs.

'Lost forever'

Bundling media player in with its Windows software meant that consumers rarely looked for similar products offered by other companies, critics argued.

The EU agreed and told Microsoft in March that it had 120 days to reveal details of its Windows software codes so rivals could design compatible products more easily.

It was also instructed to offer a version of its Windows operating system minus the media player within 90 days.

It could, however, still sell Windows with the media player included.

"The remedies will not only hurt Microsoft, they will hurt many other software development companies and web site developers who have built products for the Windows platform," the company's lawyer Horacio Gutierrez said.

"Once Microsoft releases code under this decision, those intellectual property rights are lost forever, even if the court grants our appeal," the company added.




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