European Commission fines Microsoft $613M in antitrust case

Sign up to receive Security Resource Alerts

March 24, 2004 (IDG News Service) -- The European Commission fined Microsoft Corp. $613 million and ordered the U.S. software giant to offer a version of its Windows operating system without the Windows Media Player software within 90 days, the commission announced today. The ruling comes at the close of a five-year investigation into the company's business practices in Europe.

Microsoft said it will challenge the ruling at the European Court of First Instance in Luxembourg. An alternative settlement the company offered to the EC last week would have given consumers more choice and benefits than the commission's ruling does, Microsoft said. It proposed to install three non-Microsoft media players in addition to its own on any PC sold with Windows, a move that it said would have led to the distribution of more than 1 billion competing media players over the next three years.

The ruling may be too little too late, according to one analyst. "None of what the European Union imposed will hurt Microsoft in the short term. The fine doesn't hurt, and the unbundling [of Media Player] won't hurt in the next two years. It's all taken too much time," said Jaap Favier, an analyst at Forrester Research Inc.

The commission concluded that Microsoft broke EU competition law by leveraging its near monopoly in the PC operating system market to gain advantage in the markets for workgroup server operating systems and media players.

In addition to the fine, the EC ordered Microsoft to change its illegal conduct. The company must disclose within 120 days details of the software interfaces used by its products to communicate with Windows and to sell a version of its operating system without Windows Media Player.

The decision will make it possible for fair competition to develop in the markets concerned and sets clear principles for the future conduct of companies with dominant market positions, the commission said in a statement.

Microsoft abused its near-monopoly market position in PC operating systems by deliberately restricting interoperability between PCs running Windows and workgroup servers running non-Microsoft operating systems, allowing it to reach a dominant position in the workgroup server market as well, the commission said.

It ordered Microsoft to provide complete and accurate documentation of the software interfaces between its products so that competing vendors can build compatible systems. The documentation must be updated for each new product released. If this information is protected by European intellectual property laws, Microsoft will be entitled to reasonable remuneration, the commission said.

The ruling doesn't require Microsoft to reveal its source code.

The commission also found that Microsoft had abused its position in the PC operating system market to weaken competition for media players, which is software that replays audio and video content on a PC. As a result, within 90 days Microsoft must offer a version of Windows without its Media Player software. The EC said Microsoft may not charge PC manufacturers a lower price for the version including its media player. Manufacturers will still be free to bundle competing media player software with their PCs, the commission said, meaning that consumers will still have access to PCs ready to play video and audio content.

Sun Microsystems Inc., one of the two companies whose complaints to the EC triggered the investigation, reacted immediately to the ruling, calling the decision important for consumers and for increased innovation and competition worldwide.

With Microsoft forced to disclose details of the software interfaces between its server and desktop operating systems, IT managers will be able to choose from a greater variety of workgroup servers, knowing that they will be able to interoperate with Microsoft desktops, Sun said.

Print this Story

Send Us Feedback

E-mail this Story

Digg this Story

Slashdot this Story

"One presidential candidate publishes his views on technology and the other doesn't. But does it really matter?..." Read more... "My colleague Mike Elgan points out in his blog that..." Read more... Read more Government & Regulation posts or See all Blogs

Microsoft promises four patches next week Google gives away home-cooked Web application security scanner Expect iPhone, Fourth of July scams, security firm says More top stories...

Microsoft trumpets security additions in upcoming IE8 Apple cuts price of high-end SSD MacBook Air by $500 Ultrathin showdown: Apple MacBook Air vs. Lenovo ThinkPad X300 vs. Toshiba Portege R500

This old laptop: Revitalizing an aging notebook on the cheap All it takes is a couple hours and about $125 to breathe new life into an old laptop. Here's how. Bill Gates moves on Is Microsoft's Golden Age over? What are Gates' most memorable quotes? Find out in Computerworld's complete coverage of the end of the Bill Gates era at Microsoft. Five things you should never tell your boss There are some things your CIO definitely doesn't want to hear. Also don't miss the flipside, Five things you should always tell your boss. Hands-On: Firefox 3 fixes what's broke and keeps what's right With its latest version, Mozilla's browser continues to raise the bar for what Web browsers should be. Windows Vista A to Z Reviews, analyses, how-tos, visual tours, hot issues and predictions about Microsoft's new OS. More Continuing Coverage After 9/11: Homeland SecurityAsk a Premier 100 IT LeaderBlackBerry Legal BattleData Security BreachesElectronic VotingFirefoxH-1B VisasHP's Boardroom ScandalHandheld DevicesHurricane Katrina AftermathMicrosoft Legal IssuesMicrosoft's VistaOpen SourceRFID TechnologySCO's Linux FightSarbanes-Oxley ActSpamVoice Over IPWi-FiWindows Meta File VulnerabilityWindows XP Service Pack 3 IT Careers 2010 Four years from now, the IT field will be a vastly different place. Will you be ready? More Special Reports Premier 100 IT Leaders 2007 Best in Class2006 Computerworld Horizon Awards2006 Premier 100 IT Leaders2006 Salary Survey2007 Best Places to Work in IT2007 IT Forecast2007 Premier 100 IT Leaders40 Years of ComputerworldASPs, Take TwoBest Places to Work in IT 2003Best Places to Work in IT 2004Best Places to Work in IT 2005Best Places to Work in IT 2006Business Intelligence Home RunsBusiness Intelligence: Smarter BIBusiness Intelligence: The Future of BICRM Goes VerticalCRM: Sober CRMCareer Planning Guide 2005Careers: IT Profession 2010Computerworld Horizon Awards 2005Data Management: Mining for GemsData Management: Taming Data ChaosDevelopment: Hard-Workin' Web SitesDevelopment: New Tools New ChoicesDevelopment: The New World of Application DevelopmentDevelopment: The Web Services TsunamiDevelopment: Web Services HurdlesDisaster Recovery: Preparing for the WorstE-commerce Grows UpE-mail/Groupware: Big DecisionsFaces of Mobile ITForecast 2006Global MobileHardware: Multiple Cores, Multiple ChallengesHardware: On-Demand Un-HypedHardware: The Shape of Things to ComeHorizon Awards: 10 Cool Cutting Edge TechnologiesIT Management: Guide to Managing VendorsIT Management: Navigating Global ITIT Management: Recovery AheadIT Management: The Future of ITIT Management: The Resourceful Project ManagerInnovative Technology Awards 2004Management: Reinventing ITMicrosoft in TransitionMobile/Wireless Leaders and LaggardsMobile/Wireless: The Untethered WorkerMobile/Wireless: Tiny Gadgets, Huge CostsNetwork Management: Taking ControlNetworking: Turbulence Ahead!Networking: VoIP Goes MainstreamOperating Systems: In the Slow LaneOperating Systems: Linux Goes GlobalOperating Systems: Should You Nix Unix?Outsourcing: Offshore Buyer's GuideOutsourcing: Outsourcing DangersPremier 100 IT Leaders 2004 Best in ClassPremier 100 IT Leaders 2005 Best in ClassROI: Do the Math!Salary Survey 2003Salary Survey 2004Salary Survey 2005Security Action PlanSecurity: Compliance HeadachesSecurity: Proactive SecuritySecurity: Risk and RewardSecurity: Tips From Security ProsSouped-up SecurityStorage: Battling ComplexityStorage: Cheap & Secure Data StoresStorage: Stretching Your Storage DollarsStorage: The Lean Storage MachineStorage: The New Rules of StorageStorage: The Ultimate Backup GuideSupply Chain: Missing LinksSupply Chain: RFID Reality CheckThe Business of SecurityWeb 2.0 SecurityWireless: Wireless At Work All Zones Application Performance Zone Business Continuity Zone Data Center Management Zone Enterprise-Class Security Zone The File Data Management Zone Grid Computing on Windows Zone Security Management Zone ITIL Best Practices Zone The SAS Zone Storage Virtualization Zone Business Intelligence and Analytics Zone See your link here

Computerworld Executive Briefing: The Compliance Era Get this briefing free (a $195 value), for a limited time, courtesy of VeriSign. The new Computerworld report, The Compliance Era, explains why regulatory compliance has zoomed to the top of the IT agenda and shows how real-world IT executives are dealing with the storage, security and privacy challenges. Get this briefing free (a $195 value), for a limited time, courtesy of VeriSign. Download this executive briefing  Long Tail Supplier Collaboration - What's In It For You? Long Tail Supplier Collaboration - What's In It For You? Download this webcast, free, compliments of Sterling Commerce Go to the webcast  Web Security SaaS: The Next Generation of Web Security Download this whitepaper, free for a limited time, compliments of Webroot Software. (Source: Webroot Software) The Web is the new threat vector of choice for hackers and cybercriminals to distribute malware and perpetrate identity theft, financial fraud, and corporate espionage. This paper outlines the challenges facing many SMBs and provides solutions for overall security effectiveness and reducing the burden on IT departments. Download this white paper  White Papers Read up on the latest ideas and technologies from companies that sell hardware, software and services. Deploying Virtualized NetWare on Linux Whitepaper Toward More Flexible, Next-Generation Collaboration Solutions Driving Business Success Through Workgroup Choice and Flexibility View more whitepapers

• Microsoft promises four patches next week
• Google gives away home-cooked Web application security scanner
• Expect iPhone, Fourth of July scams, security firm says
• More top stories 

Since You Asked A weekly storage column from storage analyst, Steve Duplessie of the Enterprise Strategy Group Click here to read the latest column by Steve Duplessie

Eliminate SPAM, Gain Productivity Learn all about the dangers and the costs of spam in all its forms – from stock-touting to spreadsheet. Also, understand the drawbacks of traditional hardware- and software-based defenses – and the unique benefits of MessageLabs multi-layered, managed Anti-Spam solution; as illustrated by a real-world case study where MessageLabs stopped spam cold. Download this white paper now!  See more Whitepapers

The Spy Files For Congress to do anything that helps protect consumers and the critical Internet infrastructure as a whole, it must pass laws that require proactive processes to protect computers, not that tell people how to deal with the resulting mess, says Ira Winkler. Click here to read the latest column by Ira Winkler

Understand Messaging Archiving Email storage is growing at an average rate of 35% annually - three out of five decision makers cite the growth of messaging storage as their leading messaging-related problem. This Osterman Research white paper discusses the several reasons to implement a messaging archiving system and provide an overview of Sunbelt Software's offering focused squarely on the archiving space. Download this white paper now!