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The European Commission has emerged the clear winner in a lengthy battle with the world's most powerful software maker. On February 27, Europe's antitrust regulator levied a 899-million (us $1.3 billion) penalty on Microsoft in a ruling designed to send a message to Silicon Valley about the dangers of flouting its competition rulings.
In announcing the fine, Neelie Kroes, the European competition commissioner, expressed her irritation at Microsoft's failure to abide by the remedies stipulated in a 2004 commission ruling. The commission had come down on the company for abusing its market dominance of Windows software. Its decision required the Redmond, Washington-based computer biggie, to change its operating system for compatibility with rival systems. The ruling was upheld by Europe's second-highest court in September 2007.
"Microsoft is the first company fined by the commission for failure to comply with an antitrust decision," Kroes said. She pointed out that during the protracted negotiations with Microsoft, it had promised to change its behaviour four times. "Hopefully, it will be at the fifth time but they have to deliver," she said.
The European Commission had fined Microsoft 497million (us $750 million) in March 2004, then a record, and added 280.5 million (us $425) in July 2006 for non-compliance with its ruling. Kroes accused Microsoft of continuing to abuse its powerful market position, stifling innovation. "This had negative effects on millions of offices in companies and governments around the world."
The commission's assertive stance will be noted by other high-tech corporations, including Intel and Qualcomm, whose business models are being scrutinized by the European regulator, and Google, whose acquisition of DoubleClick is before the commission. Microsoft said it was "reviewing the commission's action", adding that the fines were "about the past issues that have been resolved". But the software biggie has pending business with the commission.
The eu's executive agency is examining whether the bundling of Internet Explorer into Microsoft Windows has unfairly excluded competitors from the Web browser market. It is also investigating whether Microsoft withheld essential information from companies that wanted to make products compatible with its ubiquitous software, including office word processing and spreadsheet programmes.