European Union regulators fined Microsoft Corp. 899 million euros ($1.35 billion) for failing to comply with a 2004 antitrust order, the largest EU fine ever imposed against a single company.
Microsoft overcharged for patent licenses that rivals needed to connect products to the Windows platform, the European Commission said. The fine brings the total penalty against the company to 1.68 billion euros in the case.
``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,'' European Competition Commissioner Neelie Kroes said in a statement today in Brussels. ``I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance.''
Microsoft has tried to allay European antitrust concerns, announcing last week that it will help competitors' software work better with some products, such as Office. While today's ruling ends the 2004 antitrust case, for which the company was fined a then record 497 million euros, last month the EU opened two new probes into Microsoft's business practices.
Microsoft, the world's largest software company, said in a statement that it would review the decision. The Redmond, Washington-based company sought to limit potential EU fines by agreeing in October to make network data available to open- source software developers so server software can connect to the Windows operating system.
`Past Issues'
``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.''
Microsoft shares traded in Germany fell 0.6 percent to the equivalent of $28.22 at 2:45 p.m. in Frankfurt, from the close of $28.38 in Nasdaq Stock Market trading yesterday.
The EU fine isn't as important to Microsoft as its proposed $31-per-share bid for Yahoo! Inc., said Robert Jacobsen, an analyst at Jyske Bank A/S in Silkeborg, Denmark who has an ``accumulate'' rating on Microsoft shares
``Investors aren't reacting because it was well communicated in the market that the EU wasn't happy with Microsoft,'' Jacobsen said. ``This isn't a fundamental issue. The acquisition of Yahoo has taken on much more importance.''
Other Antitrust Cases
The commission, known for vetoing General Electric Co.'s proposed $47 billion merger with Honeywell International Inc. in 2001, has ramped up its oversight of U.S. technology companies such as Intel Corp., Rambus Inc. and Qualcomm Inc. in recent years. Last July the regulator charged Intel with abusing its dominance in the computer-chip market. It's also probing potential antitrust abuses by Rambus and Qualcomm over royalty rates on chip-technology licenses.
On March 1, 2007, the EU threatened Microsoft with millions of euros in daily fines backdated to December 2005 for failing to fully comply with the 2004 antitrust order.
Under that decision, Microsoft had to provide data to rivals to allow servers to connect to the Windows platform. When patent licenses were necessary for that network data, Microsoft was required to charge ``reasonable'' royalties.
New Investigations
Last month, EU regulators opened investigations into whether Microsoft is using its dominance in word processing and spreadsheets to thwart rivals and whether the company illegally tied an Internet browser to Windows. Today's fine isn't related to the new probes.
Kroes said at a press conference that the commission would take into consideration ``any changes'' Microsoft makes to its business practices that are relevant to the two new cases. She said that it's 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. They have to deliver and implement.''
In July 2006, the EU also imposed a 280.5 million-euro penalty on the software company for failing to license information to rivals on how Windows communicates over a network. It was the first time that the EU had fined a company for failing to comply with an antitrust order.
Microsoft overcharged for patent licenses that rivals needed to connect products to the Windows platform, the European Commission said. The fine brings the total penalty against the company to 1.68 billion euros in the case.
``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,'' European Competition Commissioner Neelie Kroes said in a statement today in Brussels. ``I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance.''
Microsoft has tried to allay European antitrust concerns, announcing last week that it will help competitors' software work better with some products, such as Office. While today's ruling ends the 2004 antitrust case, for which the company was fined a then record 497 million euros, last month the EU opened two new probes into Microsoft's business practices.
Microsoft, the world's largest software company, said in a statement that it would review the decision. The Redmond, Washington-based company sought to limit potential EU fines by agreeing in October to make network data available to open- source software developers so server software can connect to the Windows operating system.
`Past Issues'
``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.''
Microsoft shares traded in Germany fell 0.6 percent to the equivalent of $28.22 at 2:45 p.m. in Frankfurt, from the close of $28.38 in Nasdaq Stock Market trading yesterday.
The EU fine isn't as important to Microsoft as its proposed $31-per-share bid for Yahoo! Inc., said Robert Jacobsen, an analyst at Jyske Bank A/S in Silkeborg, Denmark who has an ``accumulate'' rating on Microsoft shares
``Investors aren't reacting because it was well communicated in the market that the EU wasn't happy with Microsoft,'' Jacobsen said. ``This isn't a fundamental issue. The acquisition of Yahoo has taken on much more importance.''
Other Antitrust Cases
The commission, known for vetoing General Electric Co.'s proposed $47 billion merger with Honeywell International Inc. in 2001, has ramped up its oversight of U.S. technology companies such as Intel Corp., Rambus Inc. and Qualcomm Inc. in recent years. Last July the regulator charged Intel with abusing its dominance in the computer-chip market. It's also probing potential antitrust abuses by Rambus and Qualcomm over royalty rates on chip-technology licenses.
On March 1, 2007, the EU threatened Microsoft with millions of euros in daily fines backdated to December 2005 for failing to fully comply with the 2004 antitrust order.
Under that decision, Microsoft had to provide data to rivals to allow servers to connect to the Windows platform. When patent licenses were necessary for that network data, Microsoft was required to charge ``reasonable'' royalties.
New Investigations
Last month, EU regulators opened investigations into whether Microsoft is using its dominance in word processing and spreadsheets to thwart rivals and whether the company illegally tied an Internet browser to Windows. Today's fine isn't related to the new probes.
Kroes said at a press conference that the commission would take into consideration ``any changes'' Microsoft makes to its business practices that are relevant to the two new cases. She said that it's 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. They have to deliver and implement.''
In July 2006, the EU also imposed a 280.5 million-euro penalty on the software company for failing to license information to rivals on how Windows communicates over a network. It was the first time that the EU had fined a company for failing to comply with an antitrust order.
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