The European court decision means that Microsoft will finally have to pay long-delayed fines of about $1 billion that were assessed in a 2004 antitrust case. However, the court reduced the original fine.
The long-running antitrust case against
Microsoft by the European Commission may soon finally be completed after a
European court upheld a $1 billion fine against the software giant that was
originally announced four years ago.
"In an appeals ruling, the General Court
of the European Union rejected
Microsoft's request to dismiss the fine
levied in 2008," according to
a report from the Associated Press. The court did, however, reduce the fine by
less than 5 percent to 860 million euros, or about $1.1 billion U.S. dollars,
according to the Associated Press. The original fine amounted to about 899
The court action "upholds the
Commission's decision and rejects all the arguments put forward by Microsoft in
support of annulment" of the case, according to AP.
The case, which began with a 1998
investigation, has dogged Microsoft for more than a decade with investigations,
appeals and plenty of legal maneuvering
, according to the history of the
In March 2004, the EU
hit Microsoft with a then-record fine of 497 million euros ($613 million
by the European Union for abusing its dominant market position with Windows. In
that proceeding, the company was ordered to offer computer makers a version of
Windows that didn't include the Windows Media Player. "According to
Mario Monti, the European Competition commissioner, Microsoft had abused its
dominance of the operating systems market both by tying Windows Media Player to
Windows and by failing to release information about Windows to competitors in
the server market," according to a report from that time.
Later, Microsoft was fined an additional
280.5 million euros for noncompliance in 2006 and another 899 million euros in
Rob Enderle, principal analyst with The
Enderle Group, said that while there has been plenty of drama in the case over
the years, it likely has helped Microsoft in the long run by teaching the
company some important lessons about doing business on the world stage.
"When it began, they seemed to believe
they were above the government," said Enderle. "They were very
aggressive. And they really thought that the EU was made up of uninformed
people. They very much felt that way initially about the U.S. Department of
That changed, though, as Microsoft officials
realized that "they really were dealing with entities that had a level of
power that they didnt initially comprehend, and they changed their entire
That's when the company began to work within
the system and became good at the issues that had brought the antitrust
investigation to life in the first place, such as interoperability and
licensing, said Enderle.
"They realized that what they were being
asked to do wasnt inconsistent with their business model, that there was a
different way to approach it," said Enderle.
When that happened, "things changed for
the company and the fines started going away ¦ and the EU eventually moved on
to other players," Enderle added.
While the $1.1 billion fine is still huge, the
company "in many ways got a lot of value from the money," said
Enderle. Microsoft has since gained interoperability experience, has developed
a long-needed governmental lobbying body within the company and has become a
capable political force.
"They gained experience which paid
dividends in battling other companies such as Google in the marketplace
today," said Enderle. "In the end, it may actually turn out
that there were probably cheaper ways for them to get this experience, but it
In a statement, Microsoft said it still
rejected the findings of the European Commission, which is the antitrust
watchdog for the European Union.
Although the General Court slightly reduced
the fine, we are disappointed with the Court's ruling, according to Microsoft.
The fine, which was paid several years ago, related to the price Microsoft had
proposed for one of several forms of licenses for technology Microsoft was
required to make available by the Commission's 2004 Decision. In 2009
Microsoft entered into a broad understanding with the Commission that resolved
its competition law concerns.