Michigan Business Lawyer Blog

The second-highest European court today strongly rebuked Microsoft when it rejected Microsoft's request to overturn a landmark European Commission antitrust ruling that the company had wrongfully taken advantage of its dominance in computer operating systems.

Legal and industry experts have said the decision will favor smaller software makers and place software market leaders on notice that they cannot take advantage of one technology niche to quash innovation on a broader scale.

The ruling by the European Court of First Instance ordered Microsoft to comply with a March 2004 commission order to share confidential computer code with Microsoft's competitors. The court also upheld the record financial sanction against the compan of almost $690 million.

Legal and software experts have noted that the EU court’s decision might portend problems for other high tech companies such as Qualcomm, Intel, and Apple. The market dominance of these companies in related niches such as online music, computer chips and cell phone technology is also being closely reviewed by the commission.

The decision also could make it much more difficult for Microsoft to continue the oft-critized pracatice of “bundling” new features into its Windows software.

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The effort to provide Washtenaw County with wireless Internet has hit a funding snag, but officials claim the project will continue to move forward. The program is known as Wireless Washtenaw. It is been implemented in the downtown areas of three Washtenaw County cities: Ann Arbor, Saline, and Manchester.

The company working with the county to install the wireless network is 20/20 Communications. It has applied for a $14 million loan from the US Department of Agriculture, and is also trying to secure funding from other sources. The company's original goal was to start installing wireless service in the county's rural areas in the spring of 2007, with installation to have been completed by the end of the year.

20/20 also obtained a $2 million loan from United Bank & Trust Ann Arbor for the project. A number of venture capital investors have declined to contribute funds to the project, citing concerns about the technology being used growing obsolete and the management of the project by a small local company instead of a large national firm.

However, those involved remain optimistic. Project cost estimates have decreased significantly during the last 12 months. In August 2006, 20/20 estimated the cost for the project would run $42 million. That number was decreased to $26 million in December 2006. The is now estimated at $20 million. The company has stated that the lower costs are because of equipment improvements that mean fewer radios have to be purchased and installed. Equipment costs have also decreased.

According to Washtenaw County, no taxpayer money is being used to build, operate or maintain the wireless network. 20/20 officials have indicated that if the company gets the funding it seeks, it could wrap up the whole project by mid-spring of 2008.

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California-based Barracuda Networks is planning to open a new office in Ann Arbor after a successful recruiting effort by Ann Arbor Spark. Barracuda plans to initially employ a team of eight engineers, but is planning to recruit more employees from the Ann Arbor area.

Speaking to Metromode's Great Lakes IT Report, Ann Arbor Spark's CEO, Michael A. Finney, attributed a part of the recruiting success to the so called "Google Effect". "Barracuda's choice of Ann Arbor for its new office is reflective of the 'Google effect,'" said Michael A. Finney, Ann Arbor Spark's CEO. "We're getting more and more requests from companies on both coasts following Google's lead. Interest is growing among fast-growing, knowledge-based companies interested in our region and our exceptional talent pool." One important factor in Barracuda's decision was Ann Arbor's local universities such as the University of Michigan.

Barracuda provides network security appliances for comprehensive e-mail, Internet and IM protection. Its global customer base includes Adaptec, Caltrans, CBS, Georgia Institute of Technology, IBM, NASA, Pizza Hut, Union Pacific Railroad Company, and the U.S. Treasury Department.

Ann Arbor Spark is the economic development agency for Washtenaw County. Ann Arbor Spark worked closely with the Michigan Economic Development Corp. and the University of Michigan to attract Barracuda to Ann Arbor.

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