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E.U. Slaps Third Fine on Microsoft
This set of flagpoles sits at one of the entrances to Microsoft Corporation in Redmond, Wash., Monday, Oct.19, 1998. The European Union is fining Microsoft Corp. $1.3 billion for charging rivals too much for software information. EU regulators say the company charged "unreasonable prices" to software developers who wanted to make products compatible with the Windows operating system. The fine is the largest ever for a single company and the first time the EU has penalized a business for failing to obey an antitrust order.
(Joe Brockert - AP)
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Begg called the resolution of the long-running dispute, "a knockout victory for the European Commission -- even more than the U.S. Department of Justice managed." The company was the target of a major U.S. antitrust case in the 1990s.
Microsoft's troubles with E.U. regulators began in December 1998 with a complaint by Sun Microsystems, one of the company's chief U.S. rivals. Sun complained that Microsoft was abusing a virtual monopoly and stifling competition.
E.U. investigators sided with Sun in 2004, concluding that Microsoft was unfairly withholding information from rivals that would allow them to make media players and other software usable with Microsoft's Windows operating system.
Microsoft was fined $613 million and ordered to provide rivals with more information about how Windows works so they could design compatible products. The company was also ordered to offer a version of Windows without Microsoft's media player.
Microsoft agreed, but it initially charged a nearly 3 percent royalty for that information, saying it should be paid for the technology it invented. E.U. officials said the fee was excessive and in July 2006 fined Microsoft $357 million more for failing to comply with the earlier order.
The company appealed, but a European court rejected the appeal in September 2007. The following month, Microsoft lowered its fees to a level that satisfied the E.U. regulators. The fine imposed Wednesday covered the period from the original March 2004 decree until October 2007, when officials said Microsoft finally complied.
Matt Rosoff, an analyst with Directions on Microsoft, an independent organization that tracks the company, said Microsoft's problems with European regulators are not over.
"I don't think the E.U. is going away," he said. "I think Microsoft is going to be dealing with regulators for a long time. They have made it clear that they are going to take a close look whenever Microsoft enters a market."
Staff writer Mike Musgrove in Washington contributed to this report.
