EU fines Microsoft 1337 million dollars

[petarkb]

Sauce: http://afp.google.com/article/ALeqM5...Mx_SwmtKvi7C-w

EU hits Microsoft with record 899 million euro antitrust fine

BRUSSELS (AFP) — EU competition regulators dealt a new blow to Microsoft on Wednesday, fining the US software giant a record 899 million euros for defying a landmark 2004 antitrust ruling.

The fine, worth 1.4 billion dollars, is the biggest ever levelled against a single company in an EU antitrust case and brings the total penalties against Microsoft to just shy of 1.7 billion euros.

"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," EU Competition Commissioner Neelie Kroes said.

"I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance with the commission's March 2004 decision," she added.

The European Commission, Europe's top competition watchdog, fined Microsoft 497 million euros in March 2004 and ordered the company to open some key software to rivals so they could make compatible products.

In July 2006, the commission fined the company a further 280 million euros after determining that it was not respecting its original ruling.

The commission hit Microsoft with the new penalty, the sum of daily fines running from June 21, 2006 to October 21, 2007, because it said Microsoft had failed to charge rivals reasonable prices for access to key information about its work-group or back-office servers in contravention of the 2004 ruling.

"Microsoft continued to abuse its powerful market position after the commission's March 2004 decision requiring it to change its practices," Kroes told journalists.

"Microsoft continued to stifle innovation by charging other companies prohibitive royalty rates for the essential information they needed to offer software products to computer users around the world," she added.

In reaction, Microsoft said it was "reviewing the commission's action" and highlighted that the latest EU action targeted "past issues."

"The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved," the company said.

After a five-year investigation, the commission ruled then that Microsoft had abused its share of the market for operating systems running personal computers thanks to its ubiquitous Windows programme.

In particular, it accused Microsoft of using its stranglehold on PC operating systems to elbow rivals out of the more competitive markets for media players that play music and videos, and operating systems running back-office servers.

Microsoft fought the decision tooth-and-nail until last September when an EU court threw out the company's appeal against the ruling, significantly strengthening the commission's hand in the long-running standoff.

Despite the court ruling, Microsoft's troubles with EU competition regulators are far from over.

Since its court victory, the European Commission has launched a new investigation targeting the interoperability of a broad range of software, including Microsoft's popular Office package, with rival products.

Last week Microsoft said it was making "broad-reaching changes" to its technology and business practices to enhance the ease with which its software interacts with partners, customers, and competitors.

However the commission gave the move a lukewarm response, saying that it had seen similar promises from Microsoft in the past.

"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," Microsoft said.

Microsoft were pwned.

[Werner]

that 1337

[RUU-CHAMA]

Thats great, its about time we put Microsoft in its place. Now if you will excuse me, I have 'Atlas Shrugged' to finish reading because it seems relevant for some reason.

[VR6]

What is this communism? I hate how microsoft gets picked on just for being successful.

[anti-net]

I wouldn't mind so much if I knew where this money went? Having said that one of my collage buildings was built with EU money.

[MattD1zzl3]

1.7 billion? Pocket change! They make that much in a day probibly.

GO MICRO$OFT! AMERICAN DOMINATION MARCHES ON!!

[avanti]

What I don't get is why they get penalized for being successful, yes they might have a "un-fair" advantage on their competitors. But why the hell should they help their competitors become more competitive, its absurd!

[BerserkerCatSplat]

Microsoft spent decades getting an "unfair advantage" through shrewd business practices - and I respect that hugely. The "competition regulators" can go suck eggs.

[Cobol74]

Because it puts prices up for the consumer and restricts choice and hence is anti competitive. US anti trust would do the same to any company - in-fact I believe that the did take Microsoft to task.

[avanti]

But we are living in a free market economy where supply and demand controls the prices. If Microsoft or any other company for that matter can sell their products at equilibrium price, even if that is $1.000 for a cd of Windows no one should be able to stop them.

As long as there have been computers I believe that there has been an alternative to windows/office, if not, it is not MS's fault. Certainly in 2008 there are several alternatives, and no one is forced to buy MS products.

[Cobol74]

No, if any company has a 'dominant position' it can control the market. This was not for the OS but add ons. I believe that the API they were publishing was not the same as the one that they were using for the in-house products and they were charging ludicrous amounts for the licences to use it by vendor companies, which EU Regulators deemed Microsoft to have done in contravention of the law - now why they got such a big fine was for ignoring a previous finding and continuing their anti-competitive practices.

However, I personally actually doubt anything the EU ever does is completely honest so who is in the right I am not sure.

http://www.latimes.com/technology/la...ck=1&cset=true

[noname00]

I really hate the EU. in my opinion the fine is illegal.

[epp_b]

What is this communism? I hate how microsoft gets picked on just for being successful.

It's not that simple, and I think you're smart enough to know that. Monopolies have to play by different rules than business with much less market share.

[Hidden_Hunter]

I don't agree with the fine but I'm not from the EU so it's not my problem

The article cites that microsoft unfairly uses it's size to push it's media player, what the hell is iTunes doing then? Every man and his dog seems to have it.

[epp_b]

The article cites that microsoft unfairly uses it's size to push it's media player, what the hell is iTunes doing then? Every man and his dog seems to have it.

I have to agree with that one. In a perfect EU, they'd be slamming Apple for this as well.

[Wizegui]

Thats what they get for attempting to sell Vista at any price over $100.

[Final Daihatsu]

EU has been bribed by apple.

[petarkb]

Originally Posted by noname00

I really hate the EU. in my opinion the fine is illegal.

So you think it's OK if Microsoft wants billions from competitors to sell them the official documentation of the .doc format? Because this is what the fine's about. The money then goes to the EU tax fund. The budget stays the same, but the countries have to pay less tax. In a way, Microsoft is paying your tax, so shuddup.

BTW, I've never seen consumers whine because their interests are being pushed forward.

[chaos386]

Originally Posted by petarkb

BTW, I've never seen consumers whine because their interests are being pushed forward.

It's because Microsoft is a US company. Everyone assumes that any EU fines or restrictions are some Europe vs. The US thing rather than just routine antitrust rulings.

As for why Apple doesn't get flack for bundling iTunes with OS X, that's because they have something like a 6% market share, nowhere near a monopoly. Requiring iTunes to sync your iPod is fine, legally, because the iPod needs a program to build the index on the player; you don't need WMP to use Windows. That, and Apple's share of the music player market is around 70% (less if you include cell phones, now that some do double duty as PMPs), compared to Microsoft's ~90% share of the desktop OS market. Even then, it's not like Apple hasn't earned the ire of at least one EU country.

[wien]

Originally Posted by avanti

But we are living in a free market economy where supply and demand controls the prices.

Except you aren't. In a completely free market there would be no government sanctioned rights such as copyright and patents and players like Microsoft would not be able to achieve such a stranglehold on the market as they currently have. Anyone would be able to duplicate and distribute their products for nothing, and they would have no leverage.

Now as I'm sure you can agree a completely free market isn't the best arena for innovation or invention in general, so to rectify that we let the government put a few mechanisms in place to grant a company or a person exclusive rights to their inventions over a limited time period. Copyright and patents. This makes it possible for them to spend a few bucks on developing a technology since they will have exclusive rights to selling it if it works out. It basically stimulates the market and speeds progress.

Now because you have this free market hybrid instead of a truly free market you end up with a system where a player who has a dominant position in one market (say desktop OSes) is able to use that as a lever to break in to other related markets (like server OSes, media players, web-browsers etc.). By either bundling their products together for free, or by making sure that their products in the first market only communicate with their own products in the other markets, and then protecting this communication method using copyright and patents, this player effectively has the market by the balls.

This is where anti-trust legislation enters the picture. Since we want to keep copyright and patents in effect (as they mostly work to the benefit of the market), but don't want companies to exploit these rights to destroy competition, we let the government put some more laws in place that changes the game's rules for players in a dominant market position. These (among other things) say that if you are in such a dominant position in one market, you can't use that position to gain an unfair advantage in other markets.

THAT is what the EU case is about. Microsoft has for years and years been using their dominant position in desktop OSes to destroy competition in other markets (most notably server OSes where Microsoft was a small player up until a few years ago). This isn't about destroying the free market at all, it's exactly the opposite. It's about keeping the market as free as it can be given the tweaks we've done to the proper free market system through copyright