EU hits Microsoft with €899m fine

Microsoft has been fined for charging unreasonable prices for access to interoperability information

Microsoft has been fined €899m by the European Union for failing to comply with earlier judgements.

The software giant was given 120 days back in 2004 to provide competitors with interoperability information, which it agreed to do.

But this new fine was imposed because the EU is unhappy at the amount of money Microsoft charged companies for this data.

"Today's decision finds that, prior to 22 October 2007, Microsoft charged unreasonable prices for access to indispensable interoperability information," said European competition commissioner Neelie Kroes.

"In plain English, Microsoft continued to abuse its powerful market position after the Commission's March 2004 decision requiring it to change its practices.

"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."

Kroes added that this is the first time in 50 years that a company has been fined for non-compliance.

A Microsoft spokesperson said in a statement: "We are reviewing the Commission's action.

"The Commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved.

"As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are trying to focus on steps that will improve things for the future."

Microsoft originally licensed the information for a 2.98 per cent royalty but later shifted to charging a flat fee of €10,000.

Kroes also warned other companies not to try the same tactics. "There are lessons that I hope Microsoft, and any other company contemplating similar illegal action, will learn," she said. "Talk is cheap; flouting the rules is expensive."