Microsoft fined €899m on alleged flouting of 2004 order

"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."

In 2004 the Commission found that Microsoft had abused its dominant position in the software market, fined it €497m and ordered it to give other software developers the information they needed to make their technology interoperable with Microsoft's on reasonable terms.

The Commission has now ruled that only from 22 October 2007 did Microsoft offer the information on fair terms, and has fined it for its behaviour up to that date.

"Today’s Decision concludes that the royalties that Microsoft charged for…access to the interoperability information prior to 22 October 2007 were unreasonable," said a Commission statement. "Microsoft therefore failed to comply with the March 2004 Decision for three years, thereby continuing the behaviour confirmed as illegal by the Court of First Instance."

"Microsoft continued to abuse its powerful market position after the Commission's March 2004 Decision requiring it to change its practices," said Kroes. "Microsoft continued to stifle innovation by charging other companies prohibitive royalty rates for the essential information they needed to offer software products to computer users around the world. Charging such an unreasonable price effectively rendered the offer of the information pointless."

"Microsoft's behaviour did not just harm a few individuals or a handful of big companies ... directly and indirectly this had negative effects on millions of offices in companies and governments around the world," she said.

The fine is the third in four years imposed by the Commission on Microsoft. As well as 2004's €497m fine there was a penalty payment charged in July 2006 for the company's non-delivery of complete interoperability information to the Commission.

That fine was €280.5m, €1.5m a day for each of the 187 days of non-compliance that had elapsed between the original order and that fine.

Microsoft had appealed the original 2004 Decision to the Court of First Instance, which in September backed the Commission. In January of this year the Commission launched fresh antitrust proceedings against the company on similar grounds.

The new cases argue that some of Microsoft's technology is not interoperable enough with competing software and that its bundling of the Internet Explorer browser with its Windows operating system is anti-competitive.

Last week Microsoft made a public commitment to interoperability, but the Commission has said that while it welcomes the sentiments it will wait to see if they are put into practice.

"We don't want talk and promises - we want compliance," said Kroes. "We take positive changes to business practices very seriously. But again, I stress that a press release…does not necessarily equal a change in a business practice. If change is needed – and as I say, I have reached no conclusion on that – then the change will need to be on the market, not in the rhetoric."