By Andy McCue, 24 March 2004 12:32
NEWS Microsoft has been hit with a record €497m fine and will be forced to sell an alternative unbundled version of Windows in Europe after being found guilty of anti-competitive behaviour by the European Commission today.
EC competition commissioner Mario Monti delivered the verdict at a press conference in Brussels. He said the ruling had not been reached "easily or hastily" – an understatement considering the five years it has taken.
"The Commission has taken a decision that Microsoft has abused its virtual monopoly power over the PC desktop in Europe," he said.
Microsoft failed to reach agreement with the EC in talks last week over future conduct in the market and the remedies now imposed include offering a version of Windows for the desktop that does not include Windows Media Player. It now has 90 days to offer the stripped-down version to computer manufacturers.
Critically the EC has not set a price discount for the unbundled version – meaning the alternative Windows will be offered at the same price.
"We are not price regulators. We believe that competition puts a pressure on prices to be lower than they would be in a non-competitive scenario," said Monti.
Microsoft has also been ordered to open up its source code to rivals to make it easier for their products to interoperate with Windows.
The fine represents 1.67 per cent of Microsoft's worldwide revenues last year but is some way below the 10 per cent maximum the Commission could have imposed. Microsoft has 90 days to pay the fine.
A condition has also been set that Microsoft must not offer a discount to PC manufacturers to carry the version of Windows bundled with Windows Media Player.
Comments
There are 18 comments. Join the discussion
1. James Bourne
Who gets the $600million ?
2. Mark Leman
Whos next in the firing line, Microsoft is a successful business who are now being penalised for being just that.
I really cant see stripping down a OS to remove unfair advantages working very well, as a consumer i will still purchase the all in one, and then maybe purchase additional software if i did not like what i got, either way i have both then.
I dont see veritas complaining about ntbackup
And as to whether 3rd party products will work any better on a windows box because they have more code access remains to be seen, i would be confident in saying that they could also make a windows box worse.
3. anonymous
Would that be 'get' as in receive, or 'get' as in understand?
4. $cott
Well if it's going spare!
5. Simon Champion
This sounds like a total and utter waste of EU tax payers money. I, like most PC users, evaluate and use the applications I find most useful and I don't need the EU to help me do this.
How about we all stop trying to tear chunks out of Microsoft and concentrate on building real alternatives to Microsoft products instead?
6. anonymous
A more serious matter for Microsoft is the clause compelling them to open up their source code. Whilst some would argue that this is necessary for it's until-now downtrodden competitors to gather pace (I disagree - but that's just my view), surely the code that makes Windows tick is classified as Intellectual Property, and therefore prrotected by many EU laws? If this is the case, hasn't the EU just put itself between a rock and a hard place? Surely this clause, and by default the entire case, would then be unenforcable......
7. samuel
my bet?
the EU politicians and the EU bureaucrats in Brussels will be the main beneficiaries.
and i am neither a fan of microsofts nor a politician and my small business is planing on linux and Openoffice software.
8. anonymous
Although I think the fine is too lenient, I believe that the status quo will remain in Miscosoft's favour. Not many manufacturer's will bother to supply unbundled Windows when it costs the same as the bundled version. At the end of the day the provision of choice will lie with the manufacturer's rather than with Microsoft and the end user will continue to lose out.
9. Andrew Goodwill
So would Rover be fined for not making provision for me to put a Mazda engine in a rover car ?
10. anonymous
If I were Bill Gates I would revoke all Licences for Microsoft Products for use in Europe.
See what happens then, who needs who most?
11. Paul James
Should pay for a few more EU jollies and I bet it wont be paid back to the general public who have funded the court case to start with!
12. Rodney Latham
And if MS do not pay the fine - what's next? There is not a realistic alternative yet to MS products and Linux is a long way off support outlets and product.
Are we not cutting off our European nose to spite our US trade partners??
13. Micheal Do
What the hell?? Ya those people will be happy with the 600million.
14. anonymous
Those who are old enough to remember when Netscape was the best browser and IE was a poor shadow should find this verdict a positive towards a more level playing field. You should also ask yourself whether IE is really that good and does what you want now that it has no real competition or if it might be better now if Microsoft hadn't squashed Netscape?
15. anonymous
About time too, at last some-one has had the backbone to stand up to their arrogance. Please increase the size of the fine by a magnitude of 10 and distribute it to good causes.
16. Bob Robinson
If the $600M was spent by the EU with European developers to develop Linux towards the point of real competition to MS then there would have been some point in the exercise. As it is apart from Microsoft not paying for years it will have done nothing except line the pockets of a large collection of lawyers.
17. Steven Rollason
My concern is that the opening up of source code to rivals will (unless extremely well controlled) simply make it even easier for hackers and virus writers to attack Windows systems.
18. Richard South
In the light of the Microsoft verdict are makers of car radio systems going to take Fait, Ford et al to court and demand that they don't fit car radios to new cars on the grounds that it hinders choice in the marketplace? The whole things a farce. If you want another media player , you buy the software and install it:- if you want a different car stereo you buy one and fit it. Otherwise you use what's supplied.