July 2, 2012

Microsoft must pay $1.1 bil fine inantitrustcase,EUcourtrules - USATODAY.com

BRUSSELS, Belgium — BRUSSELS, Belgium A European court on Wednesday upheld most of a massive fine levied against Microsoft by the European Commission's competition watchdog, closing a case against the software giant that began in 1998.

In an appeals ruling, the General Court of the European Union rejected Microsoft Corp.'s request to dismiss the fine levied in 2008 but did trim it by 39 million euros to 860 million euros ($1.1 billion). Counting two earlier fines, the case has wound up costing Microsoft a grand total of 1.64 billion euros ($2 billion). That's the most ever resulting from a single antitrust case in Europe.

The court in Luxembourg said its decision "essentially upholds the Commission's decision and rejects all the arguments put forward by Microsoft in support of annulment."

The fine is a "penalty for noncompliance" with the watchdog's 2004 order for Microsoft to make computer-programming code available that would allow competitors' products to interface properly with Microsoft's server software.

Microsoft did so, but at a price the Commission said was so exorbitant it amounted to not complying.

The court upheld that finding but said Microsoft deserved a small break because of a letter the Commission sent in 2005 saying the company didn't have to freely distribute code that wasn't its own and was freely available elsewhere. That gave Microsoft some room to think it was okay to continue acting the way it had until 2004 and should have been "taken into account in determining the gravity of the conduct found to be unlawful," the written decision said.

The Commission's top regulator, Joaquin Almunia, said the judgment fully vindicates his office's action against Microsoft and "brought significant benefits to users."
"A range of innovative products that would otherwise not have seen the light of day were introduced on the market," thanks to the Commission, he said.

Microsoft was less enthusiastic.

"Although the General Court slightly reduced the fine, we are disappointed with the Court's ruling," the company said in a statement.

Microsoft initially was fined 497 million euros along with the 2004 order, then it was penalized another 280.5 million euros for noncompliance in 2006, and another 899 million euros in 2008.

The company has already booked provisions for all the fines and penalties and, after the ruling, it has no active outstanding quarrels with European regulators.

"In 2009 Microsoft entered into a broad understanding with the Commission that resolved its competition law concerns," the company said.

Most notably in the 2009 deal, Microsoft ended an investigation into allegedly abusive practices for bundling its Internet Explorer Web browser along with its operating systems. Microsoft agreed to offer customers a range of browsers to choose from instead.

By Toby Sterling, Associated Press Jun 28, 2012

Microsoft must pay $1.1 bil fine inantitrustcase,EUcourtrules - USATODAY.com

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