EU fines Microsoft $731 million for broken promise, warns others

Wed Mar 6, 2013 12:47pm EST
 

By Foo Yun Chee

BRUSSELS (Reuters) - The European Union fined Microsoft Corp 561 million euros ($731 million) on Wednesday for failing to offer users a choice of web browser, an unprecedented sanction that will act as a warning to other firms involved in EU antitrust disputes.

It said the U.S. software company had broken a legally binding commitment made in 2009 to ensure that consumers had a choice of how they access the internet, rather than defaulting to Microsoft's Explorer browser.

An investigation found that Microsoft had failed to honor that obligation in software issued between May 2011 and July 2012, meaning 15 million users were not given a choice.

It is the first time the European Commission, the EU's anti-trust authority, has handed down a fine to a company for failing to meet its obligations.

While the sanction is sizeable, representing more than 11 percent of Microsoft's expected net profit this quarter and 1 percent of annual sales, the Commission could have charged the company up to 10 percent of annual global revenue.

Shares of the world's largest software company fell 1.3 percent to $27.98 on Nasdaq.

"If companies agree to offer commitments which then become legally binding, they must do what they have committed to do or face the consequences," Joaquin Almunia, the EU's competition commissioner, told a news conference.

"I hope this decision will make companies think twice before they even think of intentionally breaching their obligations or even of neglecting their duty to ensure strict compliance."   Continued...

 
European Union (EU) Competition Commissioner Joaquin Almunia holds a news conference at the EU Commission headquarters in Brussels March 6, 2013. The European Union fined Microsoft Corp 561 million euros on Wednesday for failing to offer consumers a choice of web browser, a charge that will act as a warning to other technology firms involved in antitrust disputes with the EU. REUTERS/Eric Vidal