EC threatens Microsoft with $3bn fine

Link: EC clears Microsoft/Navision move

The Commission’s antitrust probe is investigating Microsoft’s bundling of Windows Media Player with its operating system, and using its dominance in the PC market to make gains in the low-end server space.

A preliminary report by the Commission indicated that Microsoft was still abusing its market position.

The Commission is considering fining Microsoft for its action, but market watchers were sceptical of the impact this will have.

‘The signs are that despite early rhetoric the outcome of the EU’s action will be comparable to that of the Department of Justice in the US – a very public and costly exercise in closing the stable door after the horse has bolted,’ said Gary Barnett, IT research director at analyst firm Ovum.

Microsoft had been threatened with an enforced break-up after being found guilty of anti-competitive behaviour in the US courts. But US officials subsequently backed down.

The commission has the power to fine Microsoft up to 10 per cent of their global turnover. For Microsoft, that is potentially a fine of $3bn, but it is unlikely to be so high.

‘The EU’s “tougher stance” is part of a well rehearsed game that regulators and vendors play in the course of resolving anti-trust issues,’ said Barnett.

‘Microsoft will probably be relieved that the EU’s complaint hasn’t changed substantially and over the coming months there will be plenty of horse-trading before the deal is finally done,’ said Barnett.

The preliminary report called for Microsoft to make it easier for rival server vendors to interface with Windows, and to either unbundled Media Player, or offer a competing product with its operating system.

Microsoft said it will examine the report thoroughly with a view to responding as according to the official timelines.

‘We will not speculate on possible outcomes or the suggested remedies, and continue to focus our efforts on responding to the Commission’s concerns.

‘Microsoft takes this investigation very seriously, and continues to work hard to maintain a dialogue that will allow positive resolution to the Commission’s concerns,’ said Horacio Gutierrez, director of legal and corporate affairs for Microsoft Middle East and Africa, in a statement.

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