Monti slaps Microsoft with record fine
Software giant Microsoft has today been fined ?497.2 million (£331 million) by the European Commission for abusing its dominance of the personal computer software market.
This is the largest fine in EU history. Representatives of national competition authorities from the 15 European Union governments took less than an hour to approve the proposed penalty.
Microsoft is being fined for its practice of bundling software and services with its Windows operating system. Bundling is a key part of the software firm’s commercial strategy.
Competition Commissioner Mario Monti has now demanded that Microsoft offers a version of Windows that comes without Media Player. The programme was at the heart of the complaint about Bill Gates’ firm, made by providers of alternative multimedia streaming software providers, including RealNetworks and Apple.
“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 ” said Monti.
“Today’s decision restores the conditions for fair competition in the markets concerned and establishes clear principles for the future conduct of a company with such a strong dominant position,” he added.
Although the fine is high, Microsoft may actually have got off lightly. The Commission has the power to levy a fine equal to up to ten per cent of sales, which would in Microsoft’s case mean a fine of $3.5 billion (£1.9 billion), although penalties rarely reach the ten per cent limit.
Microsoft has said that it will appeal the case and claims that it did not know it was breaching EU law.
The firm has already successfully fought off a similar antitrust suit brought against it by the US Justice Department.
RealNetworks is still pursuing another antitrust suit against Microsoft in the US federal court.
