Microsoft loses EU battle, Fine Totals $1.1 Billion


Microsoft loses EU battle, Fine Totals $1.1 Billion
In a much awaited ruling, Microsoft Corporation (NASDAQ:MSFT) lost a long-running battle with European Union regulators. Europe’s second-highest court decided to only slightly reduce a 2008 European Commission fine, from €899 million to €860 million ($1.1 Billion). The Luxembourg-based tribunal rejected all of Microsoft’s arguments over the fine levied by the European Commission for the company’s failure to obey an order to share data with rivals.

The case dates back to 2004, when the European Commission forced Microsoft Corporation (NASDAQ:MSFT) to provide interoperability information to rivals, so that the software would be compatible on Windows programs. Then in 2008, EU regulators fined €899 million, claiming that Microsoft sold their licenses at the flat rate of €10,000 and an optional licensing fee for worldwide use at 0.4 %, which was too high.

The non-compliance fine was almost double the original €497 million penalty, which the Commission had imposed on Microsoft for abusing its dominant position to shut out competitors. At that time, CEO Bill Gates lashed out and accused rivals of using the Commission to “castrate” his new operating system. Microsoft is the only company in more than 50 years of EU competition policy penalized for failing to comply with an order,

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In response to the fine, Microsoft said in statement it was ‘disappointed’. It questioned how the Commission could slap a fine on the company just for failing to charge decent rates when even the parameters were not finalized until much later.

The decision by the European Union regulators comes as a huge relief for the commission, as it seeks to pursue companies for failing to carry out its orders in anti-trust cases.  Chip-maker Intel Corp (NASDAQ: INTC)has a €1.06 billion penalty handed down by the commission in 2009.