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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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September 17, 2007 2:24 AM

Microsoft to study ruling before deciding on appeal

Posted by Benjamin J. Romano

In a brief press conference with reporters outside the Luxembourg court room where Microsoft was handed a defeat in Europe today, General Counsel Brad Smith said the company still has to evaluate the ruling before deciding whether to exhaust its last avenue of appeal.

"I think we need to read the decision before we make any kind of decisions," Smith told a scrum of reporters. "I believe in these kinds of things that although there's a lot of drama, one needs to step back and read first, think second and decide third ... and that is the order in which we're going to take things."

A video of his remarks can be found here (.wmv file).

Smith acknowledged that the Court of First Instance agreed with the European Commission on the most important points in the case.

He struck a conciliatory tone, recommitting Microsoft to compliance with the European competition laws it violated.

"It's clearly very important for us as a company that we comply with our obligations under European law," Smith said. "We'll study this decision carefully and if there are additional steps that we need to take in order to comply with it, we will take them. It will take us a little bit of time, at least over the next few hours, to read the decision carefully, but certainly that is one of our strongest convictions as we go forward."

He recounted efforts Microsoft has made to ensure that Windows Vista, the latest version of the operating system software in which it has a monopoly, did not run afoul of the European Commission's 2004 decision, which has now been upheld by Europe's second-highest court.

Smith said Microsoft is "gratified" that it was able to have "constructive discussions with the European Commission last year that enabled us to bring to market Windows Vista in conformity with the Commission's 2004 decision."

Smith reflected on what has transpired since the European Commission started its investigation into Microsoft's business practices in 1998:

"The world has changed. The industry has changed and our company has changed. We sought to underscore that over a year ago when we published what we describe as our Windows Principles, principles intended to ensure that future versions of Windows, starting with Windows Vista, would comport not only with U.S. law, but with the principles that are applicable here in Europe as well.
"We've sought to be open and transparent and we've sought to strengthen our ties with the rest of our industry. Indeed it's notable, that just last week we announced a new agreement with Sun Microsystems and the week before that we announced a new agreement with Novell -- two of the companies that started out on the other side of this case almost nine years ago."

Smith said one constant is the company's commitment to Europe. He said when the case started, Microsoft offered Windows in 24 European languages; today it is available in 41. In 1998, the company had 3,900 employees on the continent. Today it has 13,000. Its research and development investment has also ballooned during the past decade from $3 million in 1998 to nearly $500 million now.

Smith is expected to hold a formal press conference at 5:30 a.m., Redmond time, with reporters from around the world. Check back here afterwards for updates.

Meanwhile, European Commission officials applauded the court's decision.

"This judgment confirms the objectivity and the cerdibility odf the Commission's competition policy," Commission President Jose Manuel Barroso said in a statement, according to Reuters.

EC Competition Commissioner Neelie Kroes, viewed as a driving force behind the Microsoft case, suggested the decision could have implications for other companies, particularly those in high tech.

"The court has upheld a landmark commission decision to give consumers more choice in software markets. That decision sets an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high tech industries," Kroes said, according to a report by Dow Jones.

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