Microsoft Faces Antitrust Sanctions from European Union

Microsoft is facing tough antitrust sanctions from the European Union, after an EU panel of experts approved findings by the European Commission that the company broke competition laws. The proposed remedy would compel Microsoft to offer two versions of its Windows operating system, one with software to play audio and video and one without. The final order from the European Union is expected next week, but Microsoft has indicated that it would appeal the decision. The company remains hopeful that a settlement can be reached in the next few days.

Key Takeaways:

• Microsoft is facing antitrust sanctions from the European Union for breaking competition laws.
• The proposed remedy would compel Microsoft to offer two versions of its Windows operating system, one with and one without Windows Media Player.
• The European Union is seeking penalties from Microsoft, which could total up to $3 billion, although the actual figure would likely be much less.
• Microsoft has been bundling its operating system with its Media Player, which the European Commission sees as a violation of competition laws.
• The EU is also seeking to allow computer makers to buy Windows without having to take the Media Player, giving them choices about what audio and video software they install.
• Charles Hill, a professor of business at the University of Washington, notes that European antitrust officials have been increasingly proactive in recent years, intervening in mergers such as GE-Honeywell.
• The European investigation has been under way for five and a half years, and Microsoft says it is still hopeful that a settlement can be reached in the next few days.

Statistics:

• The proposed penalty for Microsoft from the European Union could total up to $3 billion.
• The EU investigation into Microsoft has been under way for five and a half years.
• Microsoft has been bundling its operating system with its Media Player for an undisclosed number of years.
• The European Commission has identified Windows Media Player as a key issue in the antitrust case.
• Charles Hill notes that European antitrust officials have intervened in a number of mergers in recent years, including GE-Honeywell.

Sources:

• NPR News, Seattle.
• European Commission.
• University of Washington, Business Department.