- BRUSSELS (AFP) - European
Union regulators slapped a record fine of half a billion euros on Microsoft
in a landmark anti-trust ruling that labelled the US software giant a predatory
monopolist.
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- The EU sanctions, which also include potentially far-reaching
changes to the Windows operating system, went dramatically further than
a hotly contested settlement reached by US anti-trust authorities with
Bill Gates' titan.
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- Microsoft, labelling the verdict a "setback for
our entire industry", said it would appeal to the European Court of
Justice, and seek to have the sanctions suspended in the meantime.
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- The EU's competition commissioner, Mario Monti, announced
at the end of a five-year investigation that he was fining the world's
biggest software company 497 million euros (611 million dollars).
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- The Italian commissioner also ordered Microsoft to offer
a European version of its all-conquering Windows operating system without
the Media Player program within 90 days.
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- And the Seattle-based company was ordered to disclose
"complete and accurate" data within 120 days to enable rival
companies to offer servers that can work with Windows.
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- "The commission has taken a decision today which
finds that Microsoft has abused its virtual monopoly power over the PC
desktop in Europe," Monti told a news conference.
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- In advance of the protracted legal battle at the EU's
top court, he added: "We are not expropriating Microsoft's intellectual
property... We are simply ensuring that anyone who develops new software
has a fair opportunity to compete in the marketplace."
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- Microsoft's senior vice president and head lawyer, Brad
Smith, hit back by arguing that the commission's verdict was "unwarranted
and ill-considered".
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- The requirement to offer a stripped-down version of Windows
in Europe that excludes Media Player could play havoc with the operating
system and popular websites that rely on the player, he warned.
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- "Today's decision is a setback not only for Microsoft
but ultimately for our entire industry and especially for consumers,"
Smith told reporters in Brussels via a conference call.
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- "It will freeze technology, hobble the operating
system and provide users with less value for their euro, rather than more."
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- The unprecedented size of the EU's financial penalty
might not hurt Microsoft, which has cash reserves of some 53 billion dollars.
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- But enforced changes in Europe to its Windows operating
system, which currently powers nine out of 10 of all personal computers,
will.
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- After largely settling its anti-trust problems at home
through the 2001 deal with the US Justice Department, Microsoft sees no
reason why it should undergo a drastic product overhaul in Europe.
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- Being forced to unbundle Media Player would be the thin
end of the wedge for a company that has placed an all-in-one suite of applications
at the heart of its hugely successful business strategy.
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- But critics argue that Microsoft has ridden on the back
of other companies that first developed software such as media players,
then hijacked the technology by incorporating its own version into Windows.
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- In its verdict, the commission said this strategy "deters
innovation and reduces consumer choice in any technologies which Microsoft
could conceivably take interest in and tie with Windows in the future".
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- It also found that Microsoft refused to give Sun Microsystems
and other companies vital data that would have enabled them to make servers
for computer networks that could interface with Windows.
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- RealNetworks, which complained that its own media player
could not compete with the bundled Microsoft product, hailed the EU ruling.
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- "This decision is fundamentally significant because
the European Commission has formally declared that Microsoft's media player
bundling strategy is illegal and has established the guideposts for future
bundling cases," said Bob Kimball, vice president and general counsel
at RealNetworks.
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- Sun Microsystems said the EU's order for Microsoft to
reveal interface data for the servers, and to keep the disclosed information
up-to-date, was "enormously significant".
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- The previous biggest fine levied by the EU on a company
for breaking competition rules was a 462-million-euro penalty against the
Swiss chemical firm Hoffman-Laroche in 2001, for orchestrating a vitamins
cartel.
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- Copyright © 2004 Agence France Presse. All rights
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