EU slaps a record €899m fine on Microsoft

27 Feb 2008

Software giant Microsoft has been hit with a record €899m fine from the European Commission for allegedly failing to comply with the landmark 2004 antitrust ruling against the company.

This brings the total Microsoft has been fined by the Commission since 2004 to €1.68bn.

In 2004, following an EU ruling in an antitrust case involving claims that Microsoft had a stranglehold on the PC operating system market, particularly in relation to media players, Microsoft was hit with a fine of €497m and threatened with daily fines if it failed to comply.

The additional €899m fine is the sum of all fines from June 2006 to October 2007 and relates to the company ignoring sanctions imposed by the Commission.

EU Competition Commissioner, Neelie Kroes, said in a statement that Microsoft has been the first company in 50 years of EU competition policy which the Commission has had to fine for failing to comply with an antitrust decision.

“I hope that today’s decision closes a dark chapter in Microsoft’s record of non-compliance with the Commission’s March 2004 decision.”

Kroes said the new fine relates to Microsoft charging “unreasonable prices” to rivals for access to key information about its work-group or back-office servers, in contravention of the 2004 ruling.

In 2004, after a five-year investigation, the European Court of First Instance ruled Microsoft had abused its share of the market for operating systems running personal computers and fined the Seattle company €497m.

Since then, the EU launched a new investigation targeting the interoperability of a broad range of Microsoft software, including its popular Office package, with other rivals’ products.

Last week, knowing a decision was looming from the European Commission, Microsoft revealed it will publish on its MSDN website documentation for all application programming interfaces (APIs) and communications products of its high-volume products.

“These steps represent an important step and significant change in how we share information about our products and technologies,” said Microsoft chief executive officer, Steve Ballmer, at the time.

By John Kennedy