EU Knocks Microsoft Out with a New € 900 Million Fine

Microsoft is getting jabs from all directions in the European Union arena. The software giant has found it hard to avoid the consequences of its "monopolistic" ways, and failed to dodge a couple of financial penalties imposed so far by the EU Antitrust Commission, following the landmark March 2004 ruling. Four years ago, the EU Antitrust Commission found that Microsoft had abused its Windows near-monopoly and dominant market position and ordered it to disclose interface documentation designed to permit rival companies developing non-Microsoft work group servers to benefit from full interoperability with Windows PCs and servers.

The initial financial penalty imposed on Microsoft was € 497 million, reinforced with another € 280.5 million at the end of the past year. On March 27, 2008, the EU Antitrust Commission nearly knocked Microsoft out with an additional € 899 fine. The latest penalties imposed on the Redmond company are a direct result of its failure to comply with the March 2004 decision, the Commission explained.

"Microsoft was the first company in fifty years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," said European Competition Commissioner Neelie Kroes. "I hope that today's Decision closes a dark chapter in Microsoft's record of non-compliance with the Commission's March 2004 Decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft's future conduct".

The Commission argued that the new € 899 fine is justifiable by the unreasonable royalties Microsoft had asked for its Windows protocol licensing program, prior to 22 October, 2007. The European antitrust regulator had warned the Redmond company at the end of the past year that it failed to find a correlation between the price requested by Microsoft and the "lack of innovation in a very large proportion of the unpatented interoperability information." The Commission also revealed that Microsoft was charging excessively more for patenting its protocols compared with similar interoperability technology.

Last year, the Court of First Instance in Luxembourg reinforced the Commission's 2004 ruling, and the new fine illustrates Microsoft's failure to comply with that decision for no less than three years. "Today's Decision concludes that the royalties that Microsoft charged for the information licence - i.e. access to the interoperability information - prior to 22 October 2007 were unreasonable. Microsoft therefore failed to comply with the March 2004 Decision for three years, thereby continuing the behaviour confirmed as illegal by the Court of First Instance. Today's Decision concerns a period of non-compliance not covered by the penalty payment decision of 12 July 2006 starting on 21 June 2006 and ending on 21 October 2007. The Decision does not cover the royalties for a distinct patent licence," the Commission stated.