Microsoft must pay €899m to EU

 

The European Commission fined Microsoft a record €899 million ($1.35 billion) today for defying sanctions imposed on the software giant for antitrust violations, far exceeding the original penalty.

The Commission, executive arm of the European Union, has now fined Microsoft €1.68 billion for its original violation and for failing to comply with sanctions, more than any other firm. It said no other company had ever ignored sanctions.

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

The company said in a statement that the fines concerned "past issues" and it was now looking to the future.

The Commission said in a landmark 2004 ruling - upheld by an EU court last year - that Microsoft had withheld needed interoperability information to rival makers of "work group server" software.

The software, which operates printers and sign-ons for small office groups, must interoperate with desktop Windows machines. The Commission found Microsoft denied vital interoperability codes to rivals, whose market share then shrivelled, to be replaced by Microsoft's own product.

Microsoft was ordered to provide the information. It agreed to do so but imposed high royalties on grounds of innovation.

The Commission found instead that the information lacked much innovation and was more like a lock to which Microsoft was withholding the combination. It decided the royalties were unreasonable.

"I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance with the Commission's March 2004 decision," Ms Kroes said.

After fining Microsoft €497 million in 2004, the Commission fined the company another €280.5 million in July 2006 for failing to comply with the sanctions.

The latest decision picks up from where that fine left off, for the period from June 21st, 2006 until October 21st, 2007. After that, Microsoft agreed to reduced royalties and to provide needed information.

"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," the Microsoft statement said.

Last week, knowing a large fine was imminent for its failure to provide interoperability information, the company publicly promised to publish critical information so rival programmes worked better with Windows.