EU Threatens to Boost Daily Fines Against Microsoft

Strategic Insights -

The European Union's European Commission is discussing whether to raise the ceiling on future fines against Microsoft, which has failed to comply with a 2004 antitrust ruling that the company abused its dominant market position. The current ceiling is 2 million euros ($2.5 million) a day, but regulators are considering raising it to 3 million euros ($3.8 million). The penalty could approach the record 497 million euro ($620 million) fine the Commission already imposed in its landmark decision against Microsoft. A decision on the total daily fines Microsoft owes to date is expected on Wednesday.

Key Takeaways:

  • Microsoft has failed to comply with the March 2004 antitrust ruling that the company abused its dominant market position.
  • The EU's European Commission is considering raising the ceiling on future fines against Microsoft from 2 million euros ($2.5 million) to 3 million euros ($3.8 million) per day.
  • The penalty could approach the record 497 million euro ($620 million) fine the Commission already imposed in its landmark decision against Microsoft.
  • Microsoft has appealed the European Commission's original decision to the Court of First Instance, Europe's second-highest court.
  • A ruling on the appeal could take months and may not resolve the issue soon.
  • Microsoft's rivals, including Linux, have been impacted by the company's bundling of software features and products.
  • The interoperability issue has led to regulatory attention, with the EU seeking to level the playing field for makers of software for work group servers.

Statistics:

  • 90%: The percentage of personal computers worldwide that run Microsoft's Windows operating system.
  • 497 million euros: The record fine imposed by the European Commission against Microsoft in its landmark decision.
  • 2 million euros: The current daily fine ceiling against Microsoft, which is being considered to be raised to 3 million euros (approximately $3.8 million) per day.
  • 10%: The decline in Microsoft's stock price for the year.
  • 23.50: The closing price of Microsoft's stock on Monday.

Sources:

  • Reuters: "EU considers higher fines for Microsoft over antitrust case"
  • Citigroup: Brent Thill, analyst
  • The Enderle Group: Rob Enderle, analyst