Microsoft appeals 899 million EU antitrust fine

By on May 24, 2011, 7:54 PM

Microsoft is back in court today to challenge an €899 million ($1.3 billion) antitrust fine issued by the European Court of Justice in 2008. The fine was a record high at the time and penalized the software giant for failing to comply in a previous case. In 2004, the company was slapped with a €497 million ($613 million) penalty for abusing its market dominance by charging rivals exorbitant license fees for communications codes required for certain third-party applications to run properly on Windows.

As part of its ruling in that suit, the European Commission demanded that Microsoft reveal the interoperability data and charge companies "reasonable" royalties. Redmond took its time coughing up the information, claiming it didn't fully understand the EU's requests. By 2006, the EU grew tired of waiting and issued another €280.5 million sanction (€1.5 million per day from December 16, 2005 to June 20, 2006). After losing its appeal filing in 2007, Microsoft agreed to fulfill the EU's demands.

Shortly thereafter Microsoft reduced its royalty rate from 5.95% to 0.4%, and that fee only applied to commercial vendors, not open source developers. Additionally, the interoperability information was offered for a one-time fee of €10,000. So, how does the €899 million fine fit into the picture? Before cutting its rate to 0.4%, Microsoft charged competitors a royalty of 0.7% from June 21, 2006 to October 21, 2007, despite European regulators notifying the company that it was too expensive.

Microsoft has deemed the EU's 2008 fine "excessive" and "undeserved." "This case would not have arisen if the Commission had been as explicit with respect to rates which it wanted Microsoft to charge as it had been with all other terms of licensing proposed by Microsoft," said Jean Francois Bellis, Redmond's lawyer. The EU countered that argument by saying that Microsoft proved it could quickly act in accordance in 2007, suggesting that the company could have complied sooner.

"This is a case about a gambler who doubled up on a losing bet, lost again and now wants his money back," said Nicholas Khan, a lawyer for the European Commission. The 2007 EU court decision "meant that the gamble failed" and "Microsoft wants to unwind the bet." The company has filed an appeal in the General Court, Europe's second highest. A verdict is expected to take between six months and a year and legal experts quoted by Reuters believe the EU's initial ruling will stick.




User Comments: 13

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KG363 KG363 said:

I fully support Microsoft in this. I'm tired of all of these EU fines. Of all of the ones publicized on this website, there hasn't been a single one that I felt was reasonable

ramonsterns said:

The story of a company playing stupid and getting their sheep slapped for doing so.

GunsAblazin said:

Microsoft knows exactly what they are doing and if they hadn't played stupid they wouldn't have to pay the fine. This is typical Microsoft and their non-competitive ways. They deserve every penny of the fine.

GunsAblazin said:

The EU don't play that.

Guest said:

Microsoft will never learn.

Guest said:

yeah... right

microsoft bullying everyone...

Guest said:

The EU isn't a pure free market for a reason. They have decided to level the playing field by making sure big companies like MS can't bully other providers out of the market through taking advantage of their monopolies. MS has to play ball in these conditions or they can get out of the market. They still have a monopoly so why get out? They should just comply instead of trying to argue to another country's standards (their own).

gobbybobby said:

kg363 said:

I fully support Microsoft in this. I'm tired of all of these EU fines. Of all of the ones publicized on this website, there hasn't been a single one that I felt was reasonable

You fully support Microsoft outpricing everyone Hampering software development, preventing it moving forward, and preventing new businesses from starting up without having massive debt/ paying massive fees to mircosoft.

The Euro government will not let any company in any business become so big that they control an entire market. If microsoft where a government they would be a dictatorship.

madboyv1, TechSpot Paladin, said:

gobbybobby said:

You fully support Microsoft outpricing everyone Hampering software development, preventing it moving forward, and preventing new businesses from starting up without having massive debt/ paying massive fees to mircosoft.

Except, it doesn't?

gobbybobby said:

The Euro government will not let any company in any business become so big that they control an entire market. If microsoft where a government they would be a dictatorship.

They have barely touched Google, who seems to be having plenty of problems of its own in Europe. When you really think about it, exhibits quite a remarkable number of similar traits to Microsoft in terms of behavior. It's just more graceful on the outside and in handling things and is everyones favorite big brother, so people don't mind it... as much.

SSaywell said:

I live in the UK and personally hate the EU and view shared by many others for a number of reason. In relation to MS the fine was stupid and I hope MS get there money back, the EU are so annoying, I pay a fair amount a year to get Sky Sport, used to get every match then the f*cking EU said it had to be split between more than one company meaning I'm expected to pay out about £15 ($24) per month so that I can watch my team on the odd occasion they are on that channel, now Sky have put there prices because the EU forced them to put down the prices they were selling there content to other company and paying over a billion pounds for just one of the sports they show ment to cover costs they had to put prices up for there own customers, so now bob down the street pays less to watch the same as I do, again f*ucking EU, it was good how it was leave alone, nobody even likes you. What the hell they are doing fines americans companys is simply beond me.

Benny26 Benny26, TechSpot Paladin, said:

@S Saywell

I'm with you bud. The EU's been nothing but a thorn in the UK's side for a long time now regarding certain laws and ways. No border control, EU working time directive, the EU human rights act, plus alot of other things.

I'de love to know how they worked out the fine of $1.3 billion...

red1776 red1776, Omnipotent Ruler of the Universe, said:

Quote: gobbybobby said:

The Euro government will not let any company in any business become so big that they control an entire market. If Microsoft where a government they would be a dictatorship.

A rather benevolent dictatorship to be sure, demonstrated by the affordability of their products...(everyone and their dog uses them) The nasty dictatorial tyrant also offers wide ranging discount packages, see student,education,non-profit etc...etc.....and the Chairman of the place runs around the planet spending billions on third world and underprivileged countries, while operating the worlds largest non-operating foundation. _The Bill & Melinda Gates Foundation.

....not exactly Pol Pot ey?

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