EU imposes record fine on Microsoft
EU imposes record fine on Microsoft
As was widely predicted, the EU's ruling in the case against Microsoft saw it impose a record fine for a competition case in Europe of 497.2 million Euros (AUD$811.6 million).
In delivering the EU's verdict, which was the culmination of a five year investigation, European Competition Commissioner Mario Monti said that Microsoft had unfairly denied access to its server industry rivals of IP information that would allow other vendors to compete in the space. He also said that the bundling of Microsoft's Media Player with Windows was restricting competition in this area as well.
"Dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition on the merits and does not harm consumers and innovation. Today's decision restores the conditions for fair competition in the markets concerned and establish clear principles for the future conduct of a company with such a strong dominant position," said Monti.
Microosft CEO Steve Ballmer saw matters somewhat differently. In a conference call held in the US in the aftermath of the EU decision, he said: "There's an important principle at stake in this case. We believe that every company should have the ability to improve its products to meet the needs of consumers. We recognise the special position our company has; but, nonetheless, we think we should have that ability to improve our products subject to the appropriate guidelines.
"The settlement we proposed would have addressed the commission's concerns in this case, but also protected our ability to improve our products."
Meanwhile, Brad Smith, senior vice president and general counsel at Microsoft, said the company would be contesting the EU's decision in the courts.
"We will file our appeal in accordance with the timetable set by the European Court of First Instance, and we will ask the court to suspend many or perhaps all of the sanctions that the European Commission ordered today. We will definitely ask the court to suspend a number of the sanctions, including the code-removal sanction that was addressed in the Media Player decision today."
Both Ballmer and Smith were quick to note that the same competitors that have sought this outcome in Europe already attempted to do so in the U.S. and, according to Smith, were ultimately unsuccessful.
"The court rejected the precise code-removal remedy that the commission has endorsed. And in rejecting that remedy the court said three important things.
"First, the court said that "innovation would be stifled" with this type of approach.
"Second, the court said that "this would disrupt the industry, harming independent software vendors and consumers."
"And, third, and I quote, the court said that this would cause "clear and certain harm to the entire personal computer ecosystem."
"So our competitors had their day in court, and it's unfortunate that after that day came and went they simply chose to move across the Atlantic to try to have a day in another court. And we think it's especially unfortunate that the European Commission today embarked on a remedy that shows so little regard for the work and decision-making of the U.S. government."
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