Microsoft Corporation was yesterday fined €497 million by European Union competition regulators after a five-year investigation, which concluded that the world's largest computer software manufacturer had stifled competition and abused its position of near-monopoly.
The European Commissioner for Competition, Mr Mario Monti, ordered that Microsoft disclose programming information about its Windows operating system so that makers of rival software could achieve full inter-operability.
He also said that, within 90 days, Microsoft should offer computer manufacturers a version of its Windows operating system that did not include its Windows Media Player.
The two remedies are directly linked to the two particular breaches of antitrust law identified by the commission:
that Microsoft was refusing to provide inter-operability information to allow competitors to compete in the market for work group servers; and
that Microsoft was tying its Windows Media Player to its operating system.
In both instances, a monopoly position in the operating systems market was being used to create dominance in a different market.
"Microsoft has abused its virtual monopoly power over the PC desktop in Europe," Mr Monti said. "We are simply ensuring that anyone who develops new software has a fair opportunity to compete in the marketplace.
"We are saying that consumers and PC hardware manufacturers ought to be able to decide which media player software they want to pre-install on their computers. They ought to choose, not Microsoft. Our decision is about protecting consumer choice and stimulating innovation."
But Microsoft responded that consumers would have been better served if Mr Monti had accepted concessions that it was offering last week, including an offer to include three competing media players on new computers.
Microsoft's general counsel, Mr Brad Smith, said that the company's offer would have had immediate effect, but the effect of the Commission's decision would be delayed as Microsoft intended to appeal to the European Court of First Instance and would ask the court to suspend the remedies required by the Commission while the appeal was heard.
"We have four to five years' litigation ahead of us," he said.
Commission officials said that they could not accept the concessions offered because they needed to set "a general framework" that would establish a context for assessing any future problems with Microsoft products and practices. The Commission is already considering other complaints about Microsoft XP, its email software and its software for hand-held computers.
Although the fine is the biggest imposed by the Commission on a single company in an antitrust case, the other remedies imposed are deemed more important. Mr Monti said the fine amounted to about 8 per cent of Microsoft's annual turnover in Europe, the Middle East and Africa.
