EC fines Microsoft a record $1.4 bil


BRUSSELS -- The European Commission on Wednesday slapped a record 899 million euro ($1.4 billion) fine on Microsoft for failing to comply with a 2004 ruling that ordered the software giant to change its business practices.

The fine comes on top of earlier penalties of 280 million euros ($420 million), imposed in July 2006, and 497 million euros ($747 million), levied in the commission's original March 2004 decision.

"Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision," EU Competition Commissioner Neelie Kroes said. "I hope that today's decision closes a dark chapter in Microsoft's record of noncompliance."

The latest fines come four years after the commission found Microsoft guilty of not providing key code to rival software makers. At the time, commission investigators also found that Microsoft unlawfully muscled out rivals in such products as media players, while unfairly linking its Internet Explorer browser to its Windows operating system at the expense of rival servers.

Last September, the European Court of First Instance upheld the 2004 decision. And just last Thursday, Microsoft announced it would open up the technology of some of its leading software, including Windows, to make it easier to operate with rivals' products -- though the promise was met with skepticism from the commission.

However, the commission's latest fine concerns Microsoft's failure to amend its rules since the last penalty, more than two years ago. And it is independent from two new anti-competition investigations that the commission launched against Microsoft in January, into whether the company unfairly ties its Internet Explorer browser to its Windows operating system as well as the interoperability of Microsoft software with rival products.

Microsoft said in a statement that it would review the latest fine.

"These fines are about the past issues that have been resolved," the company said. "As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future."

In turn, Kroes remained cautious about Microsoft's pledge to open up its source code to competitors, noting that it was the fifth time that Microsoft has made an announcement about improving interoperability.

"Talk is cheap," Kroes said. "Let's wait and let's find the reality in this case."