Software giant fined 860 million euros for failure to comply with EC ruling

Published On 05/07/2012 | By Kathryn Tomasic | Enforcement

Software giant Microsoft was hit with a fine of 860 million euros by Europe’s second highest court on 27 June 2012 (see the press release here).  The fine applies to Microsoft’s non-compliance with its information-sharing obligations flowing from a 2004 decisions relating to anti-competitive conduct.

A brief recap of the story so far … In March 2004, Microsoft was fined the more modest sum of 497 million euros for abuse of dominance (in breach of EC Article 82). The relevant conduct was described as “leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and media players” (see the press release here).  Aside from the substantial fine imposed, Microsoft was also ordered to provide interoperability information to rival open-source software developers (to allow alternative non-Windows software to “talk” with the Windows OS). It was also required to offer a version of the Windows OS without Media Player pre-installed.  The EC’s decision was subsequently upheld by the Court of First Instance in September 2007 (see the press release here).

Although Microsoft paid the fine in full, the company failed to fulfil its information-sharing obligations flowing from the decision for a period of 488 days. This led the EC to impose an additional fine of 899 million euros for non-compliance in February 2008. According to EC Commissioner Neelie Kroes, this was the first time in fifty years that the EC had had to fine a company for non-compliance with an antitrust decision (see the press release here).  Following the 2008 penalty decision, Microsoft complied with all requirements of the 2004 decision and made the relevant information available free of charge.

Microsoft challenged this additional fine before the EU General Court, but was largely unsuccessful in its appeal. Although the Court reduced the fine by 4.3% (from 899 million euros to 860 million euros), it otherwise upheld the EC’s initial finding. The small reduction in the fine reflected the fact that the EC had allowed Microsoft to await the EU General Court’s judgment on the EC’s 2004 decision before commencing the distribution of the information.

The EC has welcomed this decision.

Photo credit: john_a_ward / Flickr / CC BY 2.0

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