Schumacher admitted he did swerve but insisted it was accidental.The German, who started the day three seconds behind the American, said it was an accident as he had to swerve after being obstructed by a fan.
The four-second bonus awarded for his third-place finish gave Schumacher a one-second margin over Hincapie.
Hincapie lodged an appeal but Schumacher was confirmed as champion.
"Without the swerve provoked by Schumacher, George would not have fallen," said Discovery Channel sporting director Dirk Demol
"He would have finished second or third and would have won the Tour. The jury's decision is hard to accept. It's not fair."
Schumacher admitted he did swerve but insisted it was accidental.
"If I swerved - which I admit - it was only because I was hit by a spectator who appeared in front of me during the final sprint," he said.
"I got a fright, I changed by direction but I never had any intention of bothering George or making him fall.
"This should have been one of my greatest victories, the best moment of my career, but winning in this confusion ruins my pleasure. I don't know what else to say."
Belgian Philippe Gilbert won the stage with Italian Manuele Mori in second place.
