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EU Fines Microsoft $1.3 Billion
By: AP   |   Feb 28, 2008

Microsoft earned $14.07 billion on $51.12 billion in worldwide sales during its last fiscal year that ended June 30.

"We could have gone as high as 1.5 billion euros," Kroes said, referring to an amount equal to about $2.2 billion. "The maximum amount is higher than what we did at the end of the day. Microsoft's actions stifled innovation, hurting millions of people who use computers in offices around the world, she said, calling the fine "a reasonable response to a series of quite unreasonable actions."

The software titan fought hard against the EU's 2004 decision that ordered it to share interoperability information with rivals and sell a version of Windows without media software, taking an appeal to an EU court that it lost last September.

It was fined again in July 2006 - $357 million - for failing to obey that order.

The EU alleged that Microsoft withheld crucial interoperability information to squeeze into a new market and damage rivals that make programs for workgroup servers that help office computers connect to each other and to printers and faxes.

The company delayed complying with the EU order for three years, the EU said, only making changes on Oct. 22 to the patent licenses it charges companies that need data to help them make software that works with Microsoft.

Microsoft had initially set a royalty rate of 3.87 percent of a licensee's product revenues for patents and demanded that companies looking for communication information - which it said was highly secret - pay 2.98 percent of their products' revenues.

The EU complained last March that these rates were unfair. Under threat of fines, Microsoft two months later reduced the patent rate to 0.7 percent and the information license to 0.5 percent - but only in Europe, leaving the worldwide rates unchanged.

The EU's Court of First Instance ruling that upheld regulators' views changed the company's mind again in October when it offered a new license for interoperability information for a flat fee of $14,900 and an optional worldwide patent license for a reduced royalty of 0.4 percent.

Even as the EU moves on to new complaints, Microsoft's 1990s business practices remain the subject of oversight in the U.S.

In January, a federal judge extended a consent decree enforcing the 2002 antitrust settlement reached among Microsoft, the U.S. government and 17 states by two years. The settlement barred Microsoft from seeking deals with computer makers to exclude competing software and aimed to keep it from using its operating system monopoly to stifle competition in other products.
 

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