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Microsoft's monopoly costs it another £680m

Whatever trophies Bill Gates has on his mantelpiece, he probably wasn't looking for the one that gives Microsoft the dubious distinction of facing the largest ever fine imposed on a single company.

The European Union decided that Microsoft's software prices were "unreasonable" in a 2004 ruling, ordering the technology giant to pay what was then a record €497m fine. When the company didn't comply, the EU fined it a further €280.5m in July 2006 and has now topped that off with a £680m penalty.

The EU challenged Microsoft's domination of the PC software market, and said it needed to share more information that would allow rivals to develop compatible products. It also needed to produce a version of its Windows operating system that did not have an integral Windows Media Player - something else that the EU said was not encouraging competition.

Competition commissioner Neelie Kroes denied that the fine was vindictive, saying the it was a "reasonable and proportionate" measure that would be "a clear signal to the outside world and especially Microsoft that they should stick to the rules".

She added that it as only 60% of the maximum fine, which means Microsoft could have faced a bill of up to €1.5bn. That said, the three separate fines imposed on Microsoft now total €1.7bn in three years.

As Stan Schroeder on Mashable puts it: "Microsoft and EU have a fine relationship: Microsoft keeps on trying to wiggle out of EU's accusation of unfair business practices, and EU keeps fining them."

What does this bode for Yahoo? It can't be great. The competition commissioner described Microsoft as having "a clear disregard of its legal obligations" and dismissed a statement by Microsoft that pointed to its interoperability initiatives.


Picture by Uluen on Flickr. Some rights reserved.

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