BRUSSELS, 25 March 2004 — The European Union fined Microsoft Corp. a record 497.2 million euros ($613 million) yesterday for abusing its “virtual monopoly” with Windows and demanded concessions that go well beyond the US settlement of similar charges, setting the stage for a lengthy court battle.
Microsoft called the EU decision “unwarranted and ill-considered” and said it would ask a judge to suspend the order pending appeal. Microsoft chief executive Steve Ballmer promised the company “will respect and comply fully with European law” during the process. The EU antitrust office said it was seeking changes in Microsoft’s behavior because its five-year investigation found the software giant tried to squeeze competitors out of related markets and “the illegal behavior is still ongoing.”
It gave the US company 90 days to offer European computer manufacturers a version of Windows without the company’s digital media player, which lets computer users watch video and listen to music and is expected to gain in importance as multimedia content becomes more pervasive.
The EU also gave 120 days for Microsoft to release “complete and accurate” information to rivals in the office server market so their products can have “full interoperability” with desktop computers running Windows. “Microsoft has abused its virtual monopoly power over the PC desktop in Europe,” EU antitrust chief Mario Monti said. “We are simply ensuring that anyone who develops new software has a fair opportunity to compete in the marketplace.”
Monti said he limited the order to Europe in deference to regulators in the United States and other countries, but that doing so “will not unduly undermine the effectiveness,” given the size of the European market. Microsoft, which had $32 billion in revenue last year, does about 20 percent of its business in Europe, Middle East and Africa.
Microsoft’s general counsel, Brad Smith, told reporters he would ask the presiding judge at the European Court of First Instance, Denmark’s Bo Vesterdorf, to stay the order pending the appeal — a process that can take years.
