20th Sep 2019

EU antitrust chief slaps historic fine on Microsoft

  • With a Microsoft appeal and new commission worries on Vista, the story is far from over yet (Photo: EUobserver)

US software giant Microsoft has said it will appeal against a hefty €280.5 million fine imposed by the European Commission on Wednesday (12 July), after Brussels found the firm is still ring fencing its Windows system from competition.

Microsoft has been locked in a dispute with Brussels for years over its widely-used operating system Windows, with the commission accusing the firm of obstructing rival software firms like Adobe and IBM from running software through Windows.

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The commission in March 2004 told the US firm to fully disclose the technical information needed by competitors to offer programs to consumers which can be run on Windows.

But competition commissioner Neelie Kroes said on Wednesday that Microsoft "did not even come close" to meeting Brussels' demands.

"No company is above the law," she indicated, hitting the firm with a €280.5 million penalty covering the period from December 2005 - when a final warning was issued - to last month, amounting to €1.5 million a day.

First time in EU history

Ms Kroes warned that the company founded by Bill Gates faces additional fines of €3 million a day from the end of this month if it sticks to its recalcitrance.

She added "It is the first time ever in the 49 year history of the EU that the European Commission has had to fine a company for failure to comply with an antitrust law."

"I sincerely hope this will be the last time."

Until Wednesday, Brussels has only imposed fines on companies forming cartels, not on alleged quasi-monopolies such as Microsoft.

But as Ms Kroes was taking her characteristic firm stance while speaking in the commission press room, she heard from reporters that Microsoft had already confirmed it would file an appeal to the decision at the European Court of Justice.

"This is a democracy," Ms Kroes reacted.

Software industry divided

The US firm on Wednesday received backing by a number of software companies joined in the Association for Competitive Technology (ACT), which said in a statement that they had no problems at all with making their programs Windows-compatible.

"Microsoft has provided more than enough information and support to create interoperability, but the commission and Microsoft's competitors really want the ability to clone Microsoft software," said ACT president Jonathan Zuck.

But another group of software producers grouped in the European Committee for Interoperable Systems (ECIS) welcomed Brussels' move, AP reports.

According to a statement by ECIS, which includes PDF producer Adobe and the firm making RealPlayer, "Microsoft continues to profit in the market from every day of non-compliance."

"[The] immediate decision to appeal these fines suggest that it will continue to impede EU antitrust enforcement at every possible opportunity," the statement said.

Meanwhile, a further episode in the saga is already in sight, with Ms Kroes warning that Microsoft's new operating system Vista should also comply with EU rules.

"We are consistent in our philosophy," she said referring to the Vista system which is set to be launched next year.

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