European Commission Takes First Step Against Microsoft

Strategic Insights -

The European Commission, the executive arm of the European Union, has taken its first step towards launching a legal case against Microsoft, citing alleged abuse of market power to gain an edge in the server software market. The Commission's move comes on the heels of a complaint by Sun Microsystems, a rival software giant, which accused Microsoft of violating EU antitrust laws through discriminatory licensing and withholding key information on its Windows operating system. Microsoft has two months to respond to the charges, with the threat of a 1 percent fine on its revenues if it fails to comply.

Key Takeaways:

  • The European Commission has initiated proceedings against Microsoft, alleging abuse of market power to gain an edge in the server software market.
  • Microsoft has two months to respond to the charges, after which it could face a 1 percent fine on its revenues.
  • The Commission acted on a complaint by Sun Microsystems, which accused Microsoft of violating EU antitrust laws through discriminatory licensing and withholding key information on its Windows operating system.
  • This is the first step in a potential legal case against Microsoft, which could have significant implications for the software giant.
  • The Commission's action is separate from a US court decision that ordered Microsoft to be split into two companies, which the company is currently appealing.
  • Microsoft has been accused of using its market dominance to leverage power in adjacent markets through anti-competitive means and under the pretext of copyright protection.
  • The EU Competition Commissioner, Mario Monti, stated that the Commission will not tolerate the extension of existing dominance into adjacent markets through anti-competitive means.

Statistics:

  • Microsoft has two months to respond to the charges.
  • The potential fine on Microsoft's revenues is 1 percent.
  • The Commission's action is separate from a US court decision that ordered Microsoft to be split into two companies.
  • The Commission's complaint against Microsoft was lodged by Sun Microsystems, a rival software giant.
  • The Commission's move comes on the heels of growing concerns over Microsoft's market dominance and its impact on the software industry.

Sources:

  • UPI (Aug.)
  • British Broadcasting Corp. (British Broadcasting Corp.)
  • COMTEX (http://www.comtexnews.com)