Truemors
Microsoft was handed a $1.3 billion parking ticket today by the European Union. Here's what you need to know:
BRUSSELS, Belgium (AP) — The European Union's longest-running fight with Microsoft Corp. neared an end Wednesday as regulators imposed a record $1.3 billion fine on the world's largest software company for failing to fully comply with a 2004 antitrust order.
Microsoft has not decided whether to appeal the penalty, which amounts to a fraction of the $14.07 billion it earned in fiscal 2007. In all, the company has been fined just under $2.4 billion by European antitrust regulators over the years.
Barring an appeal, the fine shuts the door on an investigation into Microsoft's behavior that was triggered by a 1998 complaint by Sun Microsystems Inc. It alleged Microsoft was refusing to supply information that servers need to work with its market-dominating Windows operating system.
Microsoft eventually made the information available to rivals, but the EU said it charged "unreasonable prices" until last October.
Some say the fine is chump change for the corporate giant:
But analysts said the penalty, the equivalent of two weeks' free cash flow for the technology company, was a drop in the ocean for Microsoft, which last month posted a record net $4.7bn (£2.4bn) profit in its second quarter. The group has paid out $5.8bn in the past few years to settle lawsuits with rivals over abusing its monopoly. Yesterday's fine applies to the 488 days from June 21 2006 until October 21 2007 when Microsoft refused to comply with the commission's March 2004 antitrust ruling.
While others wonder if it was fair:
But some legal experts questioned the EU's move. Denis Waelbroeck, competition partner at the lawyers Ashurst in Brussels, said: "While such a fine will no doubt do wonders for the commission's image as a tough regulator, some might consider it unfair, not least since the commission refused to tell Microsoft what would be a 'reasonable' amount to charge for patent licences despite being asked several times."
Either way, some are saying the fine shouldn't affect the Yahoo merger in the U.S., if it does come about:
WASHINGTON, D.C. -
Don't expect the $1.4 billion fine levied against Microsoft by the European Commission Wednesday to scuttle the U.S. government's approval of a merger between the company and Yahoo!--should the deal come to fruition. But the penalty could gum up the merger in Europe.
For one thing, the fine does very little to tarnish Microsoft's credibility with U.S. anti-trust regulators, says Robert Lande, an anti-trust expert and professor at the University of Baltimore's law school. "These guys [U.S. anti-trust officials] have publicly said the E.U. should back off," he says.
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