EU slaps Microsoft with $1.35 billion fine

EU slaps Microsoft with $1.35 billion fine

Summary: The European Commission has hit Microsoft with an 899 million euro fine for charging unreasonable prices for access "to interface documentations for work group servers" prior to Oct. 22, 2007 and failure to adhere to a March 2004 antitrust ruling.

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TOPICS: Microsoft, Servers, EU
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The European Commission has hit Microsoft with an 899 million euro fine for charging unreasonable prices for access "to interface documentations for work group servers" prior to Oct. 22, 2007 and failure to adhere to a March 2004 antitrust ruling. That fine equates to $1.35 billion or so--a big chunk of change even for Microsoft.

Clearly, the EU isn't buying Microsoft's interoperability pitch and wanted to send a big message. However, I can't go all anti-EC on this one. Microsoft has fumbled its way through this whole process and even its latest explanations to Mary Jo Foley are weak. European Competition Commissioner Neelie Kroes, who has noted that she is a pre-emptive regulator, said in a statement that:

“Microsoft was the first company in fifty years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision. I hope that today's Decision closes a dark chapter in Microsoft's record of non-compliance with the Commission’s March 2004 Decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft's future conduct."

The commission's March 2004 decision required Microsoft to disclose complete and accurate interoperability information to developers of work group server operating systems on reasonable terms. The big hangup was over "reasonable terms." The EC argued that the best terms were as close to free as possible.

Here's the EC's retelling of the royalty spat:

Initially, Microsoft had demanded a royalty rate of 3.87% of a licensee's product revenues for a patent licence (the "patent licence") and of 2.98% for a licence giving access to the secret interoperability information (the "information licence"). In a statement of objections of 1 March 2007, the Commission set out its concerns regarding Microsoft's unreasonable pricing. On 21 May 2007, Microsoft reduced its royalty rates to 0.7% for a patent licence and 0.5% for an information licence, as regards sales within the EEA, while leaving the worldwide rates unchanged.

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.

Microsoft said in a statement via Reuters that the fine should resolve outstanding issues with the EC. The company added that last week's interoperability announcement shows that it is focusing on steps to improve the future.

Topics: Microsoft, Servers, EU

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321 comments
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  • Well ... back to work then

    I note that not even Microsoft disputes the principle or the amount of the fine.

    Since Microsoft is now making the requested interoperability information available for a flat fee plus 0.4% of the revenues (if any !) this ought to close this particular case so everyon can go back to work

    Of course there may be other disputes between the EU and Microsoft, but those are another matter.
    Golodh2
  • What a pity...

    ...it could have and should have been several times larger to convey a message that
    the evil Bloatfarm can no longer get away with its abusive, bullying and unethical
    practices.

    Then again, considering that all of its recent products (Zune, Xbox, WM, Vista, etc.)
    have been abject failures, the current fines may be enough if the EU maintains
    pressure on the most unethical group of management in the world.

    What goes through the minds of this rogue group of bandits when they sit around
    and cook up ways to screw they competitors and more importantly, their customers.

    Ballmer and his despicable crew should be ashamed of themselves but, for Ballmer
    in particular, there is nothing that could shame him.
    Jeremy W
    • I'm sitting here, trying to fathom out...

      what on earth Microsoft could have done to you personally to make you so sad, bitter and twisted as to come up with such a pointless, moronic rant.

      I'm stumped!
      Scrat
      • Is that your motto?

        "I'm stumped!"......:P

        Make a T-shirt.......

        Pagan jim
        James Quinn
        • I noticed the same issue earlier

          I'm sorry, but honestly, I have only seen such behavior from someone who has been directly affected by someone or something, so he does have a valid question.

          I do not buy into "I am this way for the greater good of mankind" but instead have learned over the years from simple observations that attitudes such as JW's indicate (to me) he has been personally slighted by Microsoft in some way, whether it be he was turned down for a job, to simply having activation codes prohibit someone from running multiple copies of on license on 50 or 100 machines, as many independent computer companies where doing in the early days.

          He takes it personally, which would indicate (once again, to me at least) Microsoft has affected him personally
          GuidingLight
          • ...or maybe he's just a support tech

            some folks seem to take every BSOD as an attack on their lives by Microsoft - as if Bill and Steve intended to steal hours of their lives away to fix the buggy OS. If you're a typical user, you don't see the bugs all that often, but if you're a tech, you see them every day. After months or years, some support folks begin to take it personally.
            WiredGuy
          • Personal attack???

            I would have thought most tech guys would consider this 'job security'.

            As long as Gates et al produce crapware and bloatware, there will always be a place for a bloated support team in every organization.

            It would be the companies themselves that have the argument based on the number of employees they have making the product do what it was supposed to do out of the box.
            The Smoking Man
          • Let's see YOU...

            ....top Bill Gates.
            Feldwebel Wolfenstool
          • In my experience...

            ...(15 years of MS based PC system support), BSODs are 98% never the fault of MS, but a driver (85%) or and installation/SW issue. Sure, the complexity of investigating a BSOD to solve the problem could be handled better by the MS code, but you CAN debug it if you have the proper level of intelligence.
            DCMann
          • Nice back hand....:P

            "If you have the proper level of intelligence" Well I do I choose years ago to go with
            Mac support. My co-workers said "Hey everyone is going MS" and I retorted by saying
            "Yup and in no time you guys will be a dime a dozen cause like you said EVERYONE is
            going MS" and I'll still be unique and you know what it ended up much like that. No
            matter where I go I end up in a support shop and I'm the highest paid tech with the
            least amount of work on my plate. Love those Macs....:P

            Pagan jim
            James Quinn
          • Wow.

            From the sounds of it, never would have guessed you were the fat cat, highest paid everywhere you went. hmmm.
            <br>
            xuniL_z
          • Well when you consider that I've worked in Maine

            and now extreme upstate NY you'll realize that yes while my relative uniquiness
            makes me rare and there for a bit more valuable still I don't rake it in. I make
            roughly $32.500.00 a year and that is considerable more than I made in Maine.
            Now this is my only source of income and when you take away rent, utilities, food,
            and Health Care taken out of my paycheck and co-pays well that does not go as far
            as you might think. I do my best to keep costs down but it's a once step forward
            two steps back kind of thing.

            Pagan jim
            James Quinn
          • Point?

            I came from rural America and on very low income blue collar area at that. What's that to with anything? <br><br>
            I wish that was my list of bills. That is a short story, my bills are a novel, and i have nothing to show for it. I have a house and one vehicle for my family. Nothing more materially, but high prices and our bills are driving us toward needing to give up the American dream of home ownership. Anyone that tells you ownership is of more value is full of bunk. When you consider the value of your home is going nowhere for who knows how long, and even then, over time, you have to put more money into the damn thing than you pay for it, but those commercials that tell you a house is key to long term wealth and it's value Doubles every 10 years....excuse me???.....and when will you start factoring in people have to put in that much to keep the damn thing up, so they've created ZERO wealth. A renter could put that ESCROW and maintenance money that piles up into a mutual fund or just a safe money market account and have more wealth at the end than the home owner. easily. Seen it written up and spelled down to the penny over and over. Renting is cheaper and if you invest, gives you much better long term wealth.
            xuniL_z
          • Oh yeah, also.....

            Employers don't discriminate, they can't against your conditinos and how much your insurance is per pay. All companies have HAD to start taking away full medical caus of the insurance and goverment agencies, it's ThOSe bastards. <br>
            NOW just *IF" you wanted to run your own busines sand you have multiple major existing health conditions, you just *TRY* to get insurance for as little as through an employer. Try it. I guarantee i pay 10 times as much as you for insurance. I've thought about dropping it but some of this stuff is way expensive. <br><br>
            I could try to find a job, with a company. But that would drive me insane working for da "Man".
            xuniL_z
      • Quote from Mrs Kroes...

        "....she added ?we don?t want talk, we want compliance. If you cheat
        the rules, you will be caught.?

        ?This should be a signal to the outside world, and in particular to
        Microsoft, that we stick to our line,? she said."

        (Source: NYTimes: February 27, 2008, Technology Page
        {http://www.nytimes.com/2008/02/28/business/worldbusiness/28m
        soft.html?ref=technology})

        The company management is a group of serial liars, cheats,
        scoundrels, and crooks. It is the functional equivalent of a rogue
        regime.

        If one hates evil, one should hate MSFT because of all of its
        despicable management acts.

        It is nothing personal. I strongly dislike Hitler, Stalin, Mao, Pol Pot,
        Chavez and other dictators. Ballmer is equally despicable, no matter
        how stupid and ridiculous he might look on YouTube. Yes, he might
        look like a harmless moronic fool but he is a thoroughly evil and
        shameless person.

        Thank God the EU has restrained him. One can only hope that there
        are bigger and more onerous fines to be brought against the rogue
        regime.

        Perhaps over time, the shareholders will see the light and remove the
        regime.
        Jeremy W
        • Wow!

          You need a hug. That much hate for a corporate head has to be draining.

          Your comparison of Balmer to Hitler, Stalin, Mao, Pol Pot,
          Chavez and other dictators is amazing! I'm sure the evidence of genocide is very prevalent in the Balmer case. (and killing off the competition is not a valid comparison)
          TGGR
          • You might want to consider...

            the $billions and untold hours of frustration that users have yielded
            to this pernicious company.

            No, Ballmer and his crew of cheats and liars have not (yet!) been
            found guilty of genocide but they certainly have cost millions of hours
            of frustration to millions (billions?) of users because the MSFT
            monopolies.

            One can only hope that the next step is criminal penalties for the
            Redmond Rogue Regime if it does not comply.
            Jeremy W
          • Unlike the untold hours of frustration

            that many Linux users have spent in the past, even after paying for support.
            But that is OK as it is Linux, and they get a free pass, correct?
            GuidingLight
          • I think you have to differentiate.

            Who are you referring to for Linux support? The support available for Linux is primarily for large companies which are using support for network connectivity. This network connectivity is essentially the same for for Windows network issues.

            In day to day and small business issues, There is no comparison. People can take a hosed Windows box, pop in a free Linux CD and be working on the internet, writing Office Documents, printing them and watching YouTube in less than a half your with no outside help whatsoever. And these are people who are not even computer savvy. That absolutely cannot e done with MS.

            You may not be a Linux user, but you really owe it to yourself to give it a try. (I'm using a NEC 17" LCD monitor)

            Just get another computer, I'm using a Sony Vaio 1.2 GHz w/256 Mb of RAM I purchased from my old employer for $40.00 and I have no issues.

            Private individuals that call MS have to pay big time for simple answers.
            Joe.Smetona
          • One could only hope

            that idiots like you, who admit to buying several generations of windows products before they decide to switch. <br>
            Do you live in Europe? If not, why don't you move there and be happy and shut up. Americans don't go for socialist government in which the law making branch is appointed and not elected and has full monopoly over that law, what it becomes and enfocing it. They could say Apple, by their standards, has a monopoly on the ipod/itunes scenario and force them to break it up tomorrow. They have intel, Google, Apple, Sun and many others in their sights right now. Do you stand behind every single one of the EU's decisons? You either do or you don't, hypocrite.
            xuniL_z