updated 6/8/2004 7:52:26 AM ET 2004-06-08T11:52:26

Microsoft Corp. said Tuesday it has filed its appeal of the European Union’s landmark antitrust decision, charging the changes in business practices demanded by EU regulators would undermine innovation and growth.

The appeal, filed Monday, asks the European Court of First Instance in Luxembourg to annul the European Commission’s March 24 decision, court and company officials said.

“We believe that the interest of consumers and other European companies should be at the heart of this case,” Microsoft’s top lawyer in Europe, Horacio Gutierrez, said in a statement. (MSNBC is a Microsoft-NBC joint venture.)

“The Commission’s decision undermines the innovative efforts of successful companies ... (and) the legal standards ... significantly alter incentives for research and development that are important to global economic growth.”

The U.S. software giant was to file separately for a suspension of the EU sanctions, which include a record $606 million fine and a potentially far-reaching order to sell a version of Windows minus its digital Media Player.

Court president Bo Vesterdorf was expected to decide within days whether to freeze the sanctions — due to start taking effect in late June — pending a final ruling on that aspect later this year. The entire appeal process is expected to take several years.

After a five-year investigation, the European Commission found Microsoft guilty of abusing its monopoly with Windows operating system software to squeeze out rivals in related markets for digital media players and low-end servers.

The EU order for Microsoft to sell a version of Windows without its Media Player cuts to the core of Microsoft’s business strategy: driving new sales of Windows by adding features that rivals charge are unrelated to the operating system.

The EU also ordered Microsoft to share more codes with server rivals so their products can work as well with Windows as Microsoft’s own.

Microsoft argues the order amounts to an unjustified violation of its intellectual property rights and will “restrict companies’ ability to add innovative improvements to their products,” according to Gutierrez.

EU Competition Commissioner Mario Monti expressed confidence Monday that his decision would withstand Microsoft’s appeal.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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