Record Fine (EUR 899 million) Imposed on Microsoft Today

Today, the European Commission (“Commission”) has imposed a fine of EUR 899 million on Microsoft for its non-compliance with the Commission’s Decision of March 2004. This is the second time the Commission has fined Microsoft for non-compliance with its March 2004 decision and the highest fine ever imposed on a single company by the Commission for the violation of competition law. Together with the first penalty decision for non-compliance (EUR 280.5 Million) and the original fine of EUR 497 million for violations of competition law Microsoft has to pay fines of more than EUR 1.6 billion in total.

Background: On 24 March 2004 the Commission found that Microsoft had violated Article 82 of the EC Treaty by abusing its dominant position, firstly by refusing to supply information regarding Microsoft’s Windows program and thus not allowing other competing programs to interoperate with the Windows Operating System. And secondly, by tying its Windows Media Player with its Operating System. In this decision, the Commission also required Microsoft to disclose “complete and accurate interoperability information” at reasonable terms. This decision has been upheld (with few minor modifications) by the Court of First Instance in September 2007.

On 12 July 2006 the Commission imposed a penalty payment of EUR 280.5 million on Microsoft for its non-compliance with the March 2004 decision. Under that decision Microsoft was required Microsoft to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers.

Today’s decision is based on the finding that Microsoft had charged unreasonable prices for access to interface documentation for work group servers between 21 June 2006 and 22 October 2007, i.e. a time period not covered by the decision of 12 July 2006. This decision included a provision specifying that if Microsoft fails to comply either with its obligation to provide complete and accurate interoperability information or to make that information available on reasonable terms, the level of daily penalty payment to which it would be potentially liable would be EUR 3 million per day as of 31 July 2006. When imposing today’s fine the Commission did not even exhaust this frame.

Click for the European Commission's press release of today's Decision.

Click for the CFI judgment (17 September 2007). [PDF]

Click for our client alert on this decision, EU Ruling Deals Blow to Microsoft.