Supplementary spanking
The European Commission (EC) has fined Microsoft a further €899 million on top of the €497 million it imposed in 2004 for not doing enough to allow interoperability with its software.
The extra fine is for Microsoft’s perceived non-compliance with the obligations required of it in that same 2004 ruling – essentially to provide third parties with interoperability information at a reasonable cost.
On 24th March 2004, the EC gave Microsoft 120 days “to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers,” or else.
Initially, Microsoft wanted 3.87 per cent of a licensee's product revenues for a patent licence and a further 2.98 per cent of their royalties just for giving them access to the interoperability information.
The EC took until 1st March 2007 to complain that it thought these charges excessive and on 21st May that year Microsoft dropped the charges to 0.7 and 0.5 per cent respectively, but just for Europe.
On 22nd October 2007 is further reduced its demands to a flat fee of €10,000 for access to the information and an ‘optional’ (?) worldwide patent license for a bargain price of 0.4 per cent of the licensee’s product revenue.
The EC seems finally to be happy with that last compromise, but is still doing Microsoft for all the time between 24th March 2004 and 22nd October 2007 that it was still perceived to be naughty.
This does call into question the reason for Microsoft’s sudden attack of philanthropy last Friday when it announced a range of broad interoperability concessions. Maybe it had received a heads-up from the EC and the punishment would have been even more severe had it not done so.
“Microsoft was the first company in fifty years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision", said European competition commissioner Neelie Kroes.
"I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance with the Commission’s March 2004 Decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft's future conduct."
It hasn’t been a great day for Microsoft, which also had to admit to a worldwide problem with logging in to its Windows Live services, such as Hotmail, Messenger and Xbox Live. Apparently it’s all sorted out now though.
It will probably get over the fine too, with a market cap of $264 billion, 2007 revenues of $51 billion and net income of $14 billion. Wall street doesn't seem too bothered either. If anything, Microsoft's share price was slightly on the rise at time of writing.
