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February 27, 2008

EU finishes toting up Microsoft’s antitrust tab

Posted by David Hunter at 12:04 PM ET.

Today the European Competition Commission announced today that Microsoft owed them an additional € 899 million ($1.3 billion) for antitrust noncompliance through October 22, 2007 when they finally settled with the EU regulators:

The European Commission has imposed a penalty payment of € 899 million on Microsoft for non-compliance with its obligations under the Commission’s March 2004 Decision (see IP/04/382) prior to 22 October 2007. Today’s Decision, adopted under Article 24(2) of Regulation 1/2003, finds that, prior to 22 October 2007, Microsoft had charged unreasonable prices for access to interface documentation for work group servers. The 2004 Decision, which was upheld by the Court of First Instance in September 2007 (see CJE/07/63 and MEMO/07/359), found that Microsoft had abused its dominant position under Article 82 of the EC Treaty, and required Microsoft to disclose interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers at a reasonable price.

Only as from 22 October 2007 did Microsoft provide a licence giving access to the interoperability information for a flat fee of €10 000 and an optional worldwide patent licence for a reduced royalty of 0.4 % of licensees’ product revenues (see IP/07/1567).

Today’s Decision concludes that the royalties that Microsoft charged for the information licence – i.e. access to the interoperability information – prior to 22 October 2007 were unreasonable. Microsoft therefore failed to comply with the March 2004 Decision for three years, thereby continuing the behaviour confirmed as illegal by the Court of First Instance. Today’s Decision concerns a period of non-compliance not covered by the penalty payment decision of 12 July 2006 (see IP/06/979) starting on 21 June 2006 and ending on 21 October 2007. The Decision does not cover the royalties for a distinct patent licence.

The penalty was expected – only the amount was unknown – and there is no suggestion that Microsoft will do more than grimace and pay up in line with their new openness stance. Of course, this is merely the tab for Microsoft’s 2004 brush with the EU and doesn’t cover any charges the EU thinks they may have run up since.

Filed under Antitrust, General Business, Governmental Relations, Legal, Microsoft

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2 Responses to “EU finishes toting up Microsoft’s antitrust tab”

  1. Microsoft 3Q08 earnings underwhelm | Microsoft News Tracker Says:

    [...] The big ticket item here was an increase of $1.2 billion in legal expenses including the EU fine. [...]

  2. Microsoft appeals EU fine | Microsoft News Tracker Says:

    [...] Back in February when the EU gave Microsoft the 899M euro bill for continued noncompliance, Microsoft gave no indication that they would do anything but grin and bear it. It turns out that wasn’t the case: "Microsoft today filed to the (EU) Court of First Instance an application to annul the European Commission decision of February 27," Microsoft said in a statement. [...]

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