Global Economics

Microsoft's Last Hope in Europe's Courts


If the software giant keeps fighting the EU's 2004 antitrust ruling, the European Court of Justice is the next rung up the judicial ladder

The European Court of First Instance has spoken—dashing Microsoft's hopes for a reversal of the European Commission's landmark 2004 antitrust case ruling against the software giant. But if Microsoft (MSFT) chooses to continue its fight, there's only one step left in the European legal system: an appeal to the bloc's highest judicial body, the European Court of Justice.

Only the Luxembourg-based tribunal, the European equivalent of the U.S. Supreme Court, has the power to overturn a decision of the European Court of First Instance, which ruled on Sept. 17 to uphold the far-reaching monopoly case first lodged against Microsoft more than seven years ago.

The Redmond (Wash.) company now has two months and 10 days to appeal the verdict to the European Court of Justice, which hears not only competition cases like Microsoft's but a wide variety of legal issues such as gender equality, free movement of people, and trademark disputes. The court was founded in 1958 as the joint court for the three treaty organizations that eventually consolidated into the European Community, the predecessor of the European Union.

Limited to Points of Law

Today the court comprises 27 judges—one from each EU member state—and eight advocates general. Members of the court are lawyers appointed by the governments of member states for renewable terms of six years. The president is Vassilios Skouris, a 59-year-old lawyer who taught law in Germany and his native Greece before serving as Greece's Internal Affairs Minister in 1989 and 1996. He was first appointed to the court in 1999 and was named its president in 2003.

The European Court of Justice may confirm or annul Court of First Instance rulings, in part or in full. But appeals are limited to points of law only: The factual findings are not subject to review, except in cases where it can be proven that the Court of First Instance misconstrued the record put before it.

And an appeal is hardly a sure bet. Between 1997 and 2006, the European Court of Justice partly or completely set aside 40 Court of First Instance rulings in competition cases—and upheld 82. Microsoft may find those odds attractive enough to mount a final appeal, but it could also opt to lay the matter to rest.

Lengthy Proceedings

The court normally sits in chambers of three or five judges, but in important cases of general interest it may convene a "grand chamber of 13 judges." Proceedings are similar to those before the Court of First Instance, consisting of a written exchange or oral arguments. Following the hearing, an advocate general issues a nonbinding opinion, which in turn will be followed by a final judgment. Cases before the European Court of Justice generally take from two to three years.

Even then, Europe's high court may decline to hear a case and throw it back to the Court of First Instance for reconsideration. But that doesn't mean either side can drag its feet: The lower court's initial judgment stands—unless it is overturned after a successful appeal.

Microsoft hasn't said yet whether it will appeal the Court of First Instance's ruling.

Schenker is a BusinessWeek correspondent in Paris.

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