After a five-year investigation into Microsoft's business practise the EU Commission has decided that the company has violated the EU competition rules by abusing its near monopoly in the PC operating system. Microsoft will have to pay a 497 million euro fine.
The Commission has been investigating Microsoft practices since 1998 following a complaint by Sun Microsystems. The Commission has ruled that Microsoft abused its market power by deliberately restricting interoperability between Windows PCs and non-Microsoft work group servers, and by tying its media player with its operating system.
Microsoft's illegal conduct has enabled it to acquire a dominant position in the market for work group server operating systems and has significantly weakened competition on the media player market. The dominant position has grave consequences for consumers according to EU competition Commissioner Mario Monti: "The ongoing abuses act as a brake on innovation and harm the competitive process and consumers, who ultimately end up with less choice and facing higher prices".
The Commission is also imposing a few remedies. Microsoft is required, within 120 days, to disclose complete and accurate interface documentation to allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers. Microsoft will not have to reveal source code.
Microsoft will also have to offer, within 90 days, to PC manufacturers a version of Windows without media player. "As a result of the Commission's remedy, the configuration of such bundles will reflect what consumers want, and not what Microsoft imposes", according to the Commission.
Commissioner Monti does not only want to restore the conditions for fair competition by the ruling but also "establish clear principles for the future conduct of a company with such a strong dominant position." The Commission wants to prevent Microsoft from controlling the digital media market, be it with encoding technology, software for broadcasting music over the internet and digital rights management.
The decision will only effect the European market and has no global impact. The Commission does not want to jeopardise existing co-operation with US anti-trust regulators.
Press release European Commission (24.03.2004)
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Questions and Answers on Commission Decision (24.03.2004)
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