Microsoft withdraws EU appeals, Intel speaks out

— 12:55 PM on October 24, 2007

On Tuesday, Microsoft announced that it was throwing in the towel after almost a decade of legal battles with the European Commission. The company said it would cough up the €497 million ($704 million) fine it was ordered to pay in 2004 and that it would comply fully with the Commission's demands. However, Microsoft didn't specify whether it would maintain its appeal for a 2006 Commission ruling that saw it slapped with a second fine, this time worth €281 million ($398 million).

The company has now clarified that point. As the Associated Press reports, Microsoft says it has withdrawn both that appeal and a second one for a Commission order pertaining to intellectual property licenses and open-source software vendors. The AP quotes Microsoft European general counsel Erich Andersen as saying, "We believe its important at this stage to focus all of our energies on complying with our legal obligations and strengthening our constructive relationship with the European Commission."

As one might imagine, Intel isn't too thrilled by Microsoft's move, especially considering the chipmaker was recently charged by the European Commission with violating EU antitrust laws. Among other things, Intel is accused of offering rebates to PC vendors if they agreed to shun AMD products. In an interview with BusinessWeek, Intel CEO Paul Otellini has voiced frustration with the Commission, saying Europe's attempts to regulate dominant firms are "very troubling." He added, "If they take that position with us, or Qualcomm (QCOM), or Microsoft (MSFT), which are all American, I might note, you wonder where they're going long-term.…They could redefine what 'success' means."

Otellini believes the Commission's argument against Intel is that the chipmaker sold under cost, which Otellini thinks is flawed. "I think if that's the central part of their argument, we'll fare fine." And unless the Commission widens its case against Intel, Otellini added, "the worst case is to write a check," referring to fines that could be as high as $3.2 million.

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