Microsoft gets record-breaking fine

After a five-year investigation into Microsoft’s business practise the EU
Commission has decided that the company has violated the EU competition
rules by abusing its near monopoly in the PC operating system. Microsoft
will have to pay a 497 million euro fine.

The Commission has been investigating Microsoft practices since 1998
following a complaint by Sun Microsystems. The Commission has ruled that
Microsoft abused its market power by deliberately restricting
interoperability between Windows PCs and non-Microsoft work group servers,
and by tying its media player with its operating system.

Microsoft’s illegal conduct has enabled it to acquire a dominant position
in the market for work group server operating systems and has
significantly weakened competition on the media player market. The
dominant position has grave consequences for consumers according to EU
competition Commissioner Mario Monti: “The ongoing abuses act as a brake
on innovation and harm the competitive process and consumers, who
ultimately end up with less choice and facing higher prices”.

The Commission is also imposing a few remedies. Microsoft is required,
within 120 days, to disclose complete and accurate interface documentation
to allow non-Microsoft work group servers to achieve full
interoperability with Windows PCs and servers. Microsoft will not have to
reveal source code.

Microsoft will also have to offer, within 90 days, to PC manufacturers a
version of Windows without media player. “As a result of the Commission’s
remedy, the configuration of such bundles will reflect what consumers
want, and not what Microsoft imposes”, according to the Commission.

Commissioner Monti does not only want to restore the conditions for fair
competition by the ruling but also “establish clear principles for the
future conduct of a company with such a strong dominant position.” The
Commission wants to prevent Microsoft from controlling the digital media
market, be it with encoding technology, software for broadcasting music
over the internet and digital rights management.

The decision will only effect the European market and has no global
impact. The Commission does not want to jeopardise existing co-operation
with US anti-trust regulators.

Press release European Commission (24.03.2004)
http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/04/382|0|RAPID&lg=EN;

Questions and Answers on Commission Decision (24.03.2004)
http://europa.eu.int/rapid/start/cgi/guestfr.ksh?p_action.gettxt=gt&doc=MEMO/04/70%7C0%7CRAPID&lg=EN&display=