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Microsoft hit with record antitrust fine

The European Commission announced a record fine on US software giant Microsoft for the company's previous failure to comply with a 2004 antitrust order.

“The European Commission has imposed a substantial fine, to be precise €899 million ($1.35 billion), on Microsoft for its non-compliance up until October 27, 2007 with its obligations under the Commission's March 2004 decision to provide interoperability information on reasonable terms,” European Union (EU) Competition Commissioner Neelie Kroes said at a press conference.

The new fine is equal to some $1.35 billion, the largest ever for a single company in EU antitrust history, and brings the total penalties against Microsoft in the four-year legal battle to €1.68 billion ($2.5 billion).

Early last March, the Commission warned Microsoft it faced new fines of millions of euros (millions of US dollars) per day, because the company continued to disobey its 2004 antitrust decision by charging “unreasonably” high prices for interoperability information.

In its 2004 decision, the EU's antitrust watchdog ordered Microsoft to supply competitors in the work group server operating system market with interface information necessary for their products to interoperate with its Windows operating system and untie Windows with its own Media Player product.

The Commission also fined Microsoft a record €497 million ($740.5 million) for the company's abuses of market power.

In July 2006, Microsoft was hit by a second fine of €280.5 million ($417.9 million) for non-delivery of complete and accurate interoperability information, which was the first time the Commission imposed a penalty for non-compliance with its decision.

“Microsoft was the first company in fifty years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision,” said Kroes.

The new fine came after Microsoft agreed in October 2007 to fully comply with the Commission's antitrust decision following a legal defeat at the European Court of First Instance one month earlier, a heavy blow to the software giant's long-time defiance.

“Finally, after three years of illegal behavior, it appears that Microsoft has come into compliance with the 2004 decision,” 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.

Dismissing the new fine as being linked to past issues, Microsoft said it was reviewing the Commission's action.

“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.

However, the antitrust struggle between the US software giant and the EU appeared far from over.

Last month, the Commission launched two new antitrust investigations against Microsoft. The first one was again in the field of interoperability, targeting a broad range of software, including Microsoft Office, and the second was related to tying of the company's internet browser with Windows.

Kroes said Wednesday's fine was purely about the 2004 decision and had nothing to do with any of Microsoft's other business practices.

Bowing to antitrust pressure, Microsoft said last week it was making “broad-reaching changes” to its technology and business practices to enhance interoperability of its products with others.

“If change is needed, then the change will need to be on the market. Not in the rhetoric,” Kroes said, refusing to predict the results of the ongoing investigations. (Xinhua)