Post by Salem6 on Mar 24, 2004 12:14:42 GMT
Software giant Microsoft must pay a fine of 497m euros ($613m; £331m) for abusing its dominant market position, the EU has ordered.
EU Competition Commissioner Mario Monti also insisted Microsoft must reveal secrets of its Window's software, which sits on 90% of the world's PCs.
Microsoft is to appeal against the EU's decision
The European Commission approved Microsoft's punishment on Wednesday.
Microsoft has already said it will appeal, kicking off a legal battle that could last years.
Microsoft has a cash pile of more than $50bn, so even a fine on this scale - a record for the EU in an antitrust case - is unlikely to hurt it commercially.
Battle lines
Industry experts say that the non-financial penalties are likely to hurt Microsoft more by opening it to further challenges and altering the regulatory environment it operates in.
Announcing the penalties, Mr Monti said they restored the conditions for fair competition in the software market.
"Dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition...and does not harm consumers and innovation," he said.
Mario Monti, EU competition commissioner
Mr Monti has set limits on Microsoft's practice of bundling software and services with its Windows operating system after complaints.
Bundling is a key part of the software firm's commercial strategy.
Mr Monti's demand for a more transparent Windows proved the sticking point in failed talks between Microsoft chief executive Steve Ballmer and Mr Monti last week.
The five year EU case was launched after complaints from rival makers of audiovisual software that Microsoft was protecting its own media player and squeezing out others.
Mr Monti has ordered Microsoft to offer a stripped down version of its Windows operating system minus the firm's MediaPlayer audiovisual software within 90 days.
Microsoft must also reveal details of its software code within 120 days, to make it easier for rivals to design compatible products.
Microsoft will still be allowed to sell Windows with Media Player bundled in.
'Unfair'
Microsoft claims that it should not be fined at all because it did not know its behaviour would breach EU law.
Mr Monti is expected to give a press conference some time after 1115 GMT.
Microsoft will give a press conference at lunchtime.
The fine tops the EU's previous record of 462m euros. That penalty was imposed on pharmaceutical group Roche after a scandal involving price fixing in the vitamin pills market.
EU 'setting a precedent'
Last-ditch talks to agree a settlement between Mr Monti and Microsoft chief executive Steve Ballmer broke down last week.
EU COMPETITION FINES
Hoffman-La Roche (2001, vitamins cartel): 462m euros
BASF (2001, vitamins cartel): 296m euros
Lafarge (2002, plasterboard cartel): 250m euros
Arjo Wiggins (2001, paper cartel): 184m euros
Nintendo (2002, restrictive distribution practices): 149m euros
Source: EU
Following the talks, Mr Monti said: "It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position."
The EU's investigation has found Microsoft to be an "abusive monopolist" which has skewed the market for audiovisual software to the detriment of its rivals.
news.bbc.co.uk/1/hi/business/3563697.stm
EU Competition Commissioner Mario Monti also insisted Microsoft must reveal secrets of its Window's software, which sits on 90% of the world's PCs.
Microsoft is to appeal against the EU's decision
The European Commission approved Microsoft's punishment on Wednesday.
Microsoft has already said it will appeal, kicking off a legal battle that could last years.
Microsoft has a cash pile of more than $50bn, so even a fine on this scale - a record for the EU in an antitrust case - is unlikely to hurt it commercially.
Battle lines
Industry experts say that the non-financial penalties are likely to hurt Microsoft more by opening it to further challenges and altering the regulatory environment it operates in.
Announcing the penalties, Mr Monti said they restored the conditions for fair competition in the software market.
"Dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition...and does not harm consumers and innovation," he said.
Mario Monti, EU competition commissioner
Mr Monti has set limits on Microsoft's practice of bundling software and services with its Windows operating system after complaints.
Bundling is a key part of the software firm's commercial strategy.
Mr Monti's demand for a more transparent Windows proved the sticking point in failed talks between Microsoft chief executive Steve Ballmer and Mr Monti last week.
The five year EU case was launched after complaints from rival makers of audiovisual software that Microsoft was protecting its own media player and squeezing out others.
Mr Monti has ordered Microsoft to offer a stripped down version of its Windows operating system minus the firm's MediaPlayer audiovisual software within 90 days.
Microsoft must also reveal details of its software code within 120 days, to make it easier for rivals to design compatible products.
Microsoft will still be allowed to sell Windows with Media Player bundled in.
'Unfair'
Microsoft claims that it should not be fined at all because it did not know its behaviour would breach EU law.
Mr Monti is expected to give a press conference some time after 1115 GMT.
Microsoft will give a press conference at lunchtime.
The fine tops the EU's previous record of 462m euros. That penalty was imposed on pharmaceutical group Roche after a scandal involving price fixing in the vitamin pills market.
EU 'setting a precedent'
Last-ditch talks to agree a settlement between Mr Monti and Microsoft chief executive Steve Ballmer broke down last week.
EU COMPETITION FINES
Hoffman-La Roche (2001, vitamins cartel): 462m euros
BASF (2001, vitamins cartel): 296m euros
Lafarge (2002, plasterboard cartel): 250m euros
Arjo Wiggins (2001, paper cartel): 184m euros
Nintendo (2002, restrictive distribution practices): 149m euros
Source: EU
Following the talks, Mr Monti said: "It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position."
The EU's investigation has found Microsoft to be an "abusive monopolist" which has skewed the market for audiovisual software to the detriment of its rivals.
news.bbc.co.uk/1/hi/business/3563697.stm