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Microsoft Fined $732 Million in European Union Antitrust Case

Microsoft Fined $732 Million in European Union Antitrust Case
By Jennifer LeClaire

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"Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems," said the EC's Joaquin Almunia of the Microsoft fine. Of course, such decisions require strict compliance. A failure to comply [by Microsoft] is a very serious infringement."
 


As expected, The European Union has levied a hefty fine against Microsoft. EU regulators issued a $732 million fine against the technology giant for failing to comply with a deal to offer browser choice to Windows users. This is the first time that the European Commission has fined a company for non-compliance with a decision.

In 2009, the EC made these commitments legally binding on Microsoft until 2014. Because Microsoft did not roll out a browser-choice screen as promised with its Windows 7 Service Pack 1 from May 2011 until July 2012, the EC estimates 15 million Windows users in the EU did not have the opportunity to choose a default Web browser other than Internet Explorer.

"In 2009, we closed our investigation about a suspected abuse of dominant position by Microsoft due to the tying of Internet Explorer to Windows by accepting commitments offered by the company," said EC vice president in charge of competition policy Joaquin Almunia.

"Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems. Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly."

Microsoft Says Sorry

According to the EC, Microsoft began offering the choice screen in March 2010 to European Windows users who have Internet Explorer set as their default Web browser. While it was implemented, the EC said the choice screen was very successful with users. The Commission reports that until November 2010, 84 million competing browsers were downloaded through it.

The EC said it took into account several factors when calculating the fine: the gravity and duration of the infringement; the need to ensure a deterrent effect of the fine; and, as a mitigating circumstance, the fact that Microsoft has cooperated with the EC and provided information that helped the EC investigate the matter efficiently.

"We take full responsibility for the technical error that caused this problem and have apologized for it," Microsoft said in a statement. "We provided the commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake -- or anything similar -- in the future."

Making an Example of Microsoft

Some say the EC is making an example out of Microsoft. Intel may feel the same way. Intel was slapped with a $1.4 billion fine, the largest European authorities ever approved, for allegedly abusing its power. Intel appealed that ruling, which is still in limbo.

According to The New York Times, antitrust regulators find that "monitoring is time consuming and resource intensive" and "it looks like Microsoft was able to forget about the Internet Explorer commitments without anyone noticing," said Emanuela Lecchi, a partner in London at the law firm Watson, Farley and Williams. "So it would seem to me that the commission may wish to make an example of Microsoft."
 

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