EXCLUSIVE-EU Microsoft judge fears decision may hurt investment

By David Lawsky

LONDON, March 12 (Reuters) - The chief judge in the landmark European Microsoft antitrust case highlighted the doubts of critics on Wednesday, saying in his first public comments on the decision he hopes it will not discourage investors.

The 13-judge Grand Chamber of the European Union's second highest court handed down a sweeping ruling in September, upholding a tough European Commission decision saying Microsoft (MSFT.O: Quote, Profile, Research) abused its dominance of PC operating systems to crush rivals. It also endorsed a 497-million euro fine.

"It would be unfortunate if it had a negative effect on the incentives to invest," said Bo Vesterdorf, whose term as president of the Court of First Instance (CFI) and as a judge ended on the same day he announced the decision.

In a speech at the Queen Mary School of Law of the University of London, he said that if investors backed off, innovation could suffer and consumers could be the losers.

Vesterdorf regretted that Microsoft had failed to appeal his court's decision and seek a definitive ruling from the EU's highest court, the European Court of Justice.

Experts said the company's chances would have been slim. The high court, which can only consider questions of law and leaves questions of fact to the lower court, has upheld the CFI in all other cases concerning abuse of dominance.

The CFI ruling endorsed European Commission sanctions against Microsoft and said the company was unjustified in tying new applications to its Windows operating system in a way that squeezed out rivals and harmed consumer choice.