/ 27 February 2008

EU hits Microsoft with record €899m antitrust fine

The European Commission fined Microsoft a record €899-million on Wednesday for failing to comply with a 2004 antitrust ruling against the United States software giant. The fine comes on top of the €497-million that Microsoft already had to pay after Europe's top antitrust watchdog found the company guilty in 2004 of abusing its dominant market power.

The European Commission fined Microsoft a record €899-million on Wednesday for failing to comply with its landmark 2004 antitrust ruling against the United States software giant.

The fine comes on top of the €497-million that Microsoft already had to pay after Europe’s top antitrust watchdog found the company guilty in 2004 of abusing its dominant market power.

“Microsoft is the first company in 50 years of European Union competition policy that the commission has had to fine for failure to comply with an antitrust decision,” EU Competition Commissioner Neelie Kroes said.

“I hope that today’s [Wednesday] decision closes a dark chapter in Microsoft’s record of non-compliance with the commission’s March 2004 decision,” she added.

The new penalty, the sum of daily fines running from June 21 2006 to October 21 2007, is the biggest that the commission has ever levelled against a single company.

The commission said it was hitting Microsoft with the new fine for charging “unreasonable prices” to rivals for access to key information about its work-group or back-office servers in contravention of its 2004 ruling.

In reaction, Microsoft said: “We are reviewing the commission’s action.

“The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved,” it added.

After a five-year investigation, the commission ruled then that Microsoft had abused its share of the market for operating systems running personal computers, thanks to its ubiquitous Windows programme.

In particular, it accused Microsoft of using its stranglehold on PC operating systems to elbow rivals out of the more competitive markets for media players that play music and videos, and operating systems running back-office servers.

It imposed a then-record fine of €497-million on the software giant with the threat of further daily fines for non-compliance.

Microsoft fought the decision tooth-and-nail until, last September, an EU court threw out the company’s appeal against the ruling, significantly strengthening the commission’s hand in the long-running stand-off.

Since its court victory, the European Commission has launched a new investigation targeting the interoperability of a broad range of software, including Microsoft’s popular Office package, with rival products.

Last week Microsoft said it was making “broad-reaching changes” to its technology and business practices to enhance the ease with which its software interacts with partners, customers, and competitors.

However, the commission gave the move a lukewarm response.

“As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future,” Microsoft said. — AFP