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Business  Published 27.06.2012
Text by: Aaron Grunwald

Microsoft must pay fine

Competition: Europe’s second highest court has ruled that tech giant Microsoft should have paid a €860 million penalty to EU antitrust authorities.

Microsoft must pay fine Photo(s) : David Laurent/Wide (archive)

The case stems from a European Commission decision in 2004 that Microsoft abused its market dominance for six years by withholding the technical information--needed to create software that runs on Microsoft’s operating system--from other firms.

The original fine was €497 million, which set off several years of negotiations between the company and the commission, although penalties for failing to comply continued to accrue. By 2008 Brussels’ “periodic penalty payments” brought the total fines to €899 million, which was about two percent of Microsoft’s worldwide turnover at the time.

Although the two inked an accord in 2009, Microsoft challenged the fines, saying they were excessive.

But on Wednesday morning, the EU General Court, based in Kirchberg, mostly upheld the penalties. The court rejected Microsoft’s request to cancel the fine entirely. However it reduced the total amount to €860 million, saying the commission had actually given the tech firm permission to restrict certain technologies from 2005 to 2007, but failed to take that into account when calculating amends.

Nevertheless, the commission welcomed the news positively.

“Today’s judgement fully vindicates the enforcement action that the commission took to ensure Microsoft’s compliance with its obligations,” Joaquín Almunia, European competition commissioner, said in a press statement. “The ruling confirms that Microsoft did not comply with the commission’s decision and that the commission was right to impose a penalty.” He added: “a range of innovative products that would otherwise not have seen the light of day were introduced on the market. The commission’s determination to enforce that requirement was instrumental in achieving that result.”

The ruling was less warmly greeted by the US-based tech concern.

“Although the General Court slightly reduced the fine, we are disappointed with the court’s ruling,” a Microsoft spokesman told Delano on Wednesday afternoon. He said that the firm had been cooperating with the commission, and should not have been penalized during the time it was negotiating over how much it could charge rival firms for access to its technology. Noting that the fine “was paid several years ago,” the spokesman stated that “in 2009 Microsoft entered into a broad understanding with the commission that resolved its competition law concerns.”

The spokesman did not say if Microsoft planned to appeal the decision to EU’s top court, the European Court of Justice, which is based in the same Kirchberg legal complex.

In early July, the General Court will hear an appeal from Intel against the commission’s €1.06 billion antitrust fine.

Keywords:   European Court of Justice, European Commission, competition, antitrust, Joaquín Almunia, Microsoft, legal, technology

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