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EU fines Microsoft record euro899 million for charging rivals too much

EU fines Microsoft record euro899 million for charging rivals too much

Microsoft Corp. must pay the European Union a record euro899 million (US$1.3 billion) fine for charging rivals too much for software information, the EU said Wednesday, drawing a line under one part of a long-running antitrust battle.
EU Competition Commissioner Neelie Kroes said Microsoft now appears to have finally complied with a 2004 EU antitrust order.
But she warned that the company was not yet in the clear because the EU last month launched new probes into Office software and Windows' Internet browser.
EU regulators fined the company again Wednesday, saying it charged "unreasonable prices" until last October to software developers who wanted to make products compatible with the Windows desktop operating system.
The fine is the largest ever for a single company and brings to just under euro1.7 billion (US$2.5 billion) the amount the EU has demanded Microsoft fork over in a long-running antitrust battle.
Microsoft immediately said that these fines were about past issues that have been resolved and the company was now working under new principles to make its products more open. It has not yet made a decision whether to appeal the size of the fine.
The penalty far outweighs the next biggest fine, also imposed on Microsoft in March 2004 when the EU ordered it to pay euro497 million (US$613 million) for using its role as the world's leading supplier of desktop software to elbow into new markets for workgroup servers and media players.
The fine largely shuts the door on an investigation into Microsoft's behavior that was triggered by a 1998 complaint by Sun Microsystems Inc. that alleged Microsoft was deliberately refusing to supply information that servers need to communicate with Windows.
Kroes was skeptical over Microsoft's claim that it has changed its ways with new license terms it announced last week, saying a Microsoft press release "does not necessarily equal a change in business practice."
"Talk is cheap. Flouting the rules is expensive," she said.
Microsoft's actions stifled innovation, hurting millions of people who use computers in offices around the world, she said, calling the fine "a reasonable response to a series of quite unreasonable actions."
"We could have gone as high as euro1.5 billion (US$2.23 billion)," she said. "The maximum amount is higher than what we did at the end of the day."
Fines _ which can hit as much as 10 percent of company's global yearly turnover _ are paid into the EU budget which pays out farm subsidies and research grants. The European Commission claims antitrust fines ultimately help reduce the financial burden on European taxpayers.
Microsoft earned US$14.07 billion (euro9.46 billion) on US$51.12 billion (euro34.37 billion) in worldwide sales during its last fiscal year which ended June 30.
The software titan fought hard against the EU's 2004 decision that ordered it to share interoperability information with rivals and sell a version of Windows without media software, taking an appeal to an EU court that it lost last September.
It was fined again in July 2006 _ euro280.5 million (US$357 million) _ for failing to obey that order.
The EU alleged that Microsoft withheld crucial interoperability information for desktop PC software _ where it is the world's leading supplier _ to squeeze into a new market and damage rivals that make programs for workgroup servers that help office computers connect to each other and to printers and faxes.
The company delayed complying with the EU order for three years, the EU said, only making changes on Oct. 22 to the patent licenses it charges companies that need data to help them make software that works with Microsoft.
Microsoft had initially set a royalty rate of 3.87 percent of a licensee's product revenues for patents and demanded that companies looking for communication information _ which it said was highly secret _ pay 2.98 percent of their products' revenues.
The EU complained last March that these rates were unfair. Under threat of fines, Microsoft two months later reduced the patent rate to 0.7 percent and the information license to 0.5 percent _ but only in Europe, leaving the worldwide rates unchanged.
The EU's Court of First Instance ruling that upheld regulators' views changed the company's mind again in October when it offered a new license for interoperability information for a flat fee of euro10,000 (US$14,900) and an optional worldwide patent license for a reduced royalty of 0.4 percent.


Updated : 2020-12-02 03:30 GMT+08:00