EU imposes record fine on Microsoft and orders opening of Windows

By Steve Malone

Posted on 24 Mar 2004 at 11:18

As expected, the European Commission has formally declared that Microsoft broke competition law.

The EU has imposed a fine of 497.2 million euros (£333 million), the biggest in EU legal history.

The company has also been ordered to offer a version of Windows without the Media Player within 90 days or face further action.

The Commission said that users however will not be put in the position - as they now are with Java for Windows - of having to go elsewhere for a media player. It said that the rulling `does not mean that consumers will obtain PCs and operating systems without media players. Most consumers purchase a PC from a PC manufacturer which already has put together on their behalf a bundle of an operating system and a media player.'

The ruling contains a provision to prevent Microsoft avoiding its conditions, by offering PC manaufacturers a discount on Windows if they agree to install Windows Media Player, for example.

Similarly, the company has been told to reveal information to allow rival server suppliers to improve interoperability with desktop Windows. It has 120 days to comply.

In a statement, the EU's Competitiion Commissioner said, 'Today's decision restores the conditions for fair competition in the market concerned and establishes clear principles for the future conduct of a company with such a strong dominant position.`

Microsoft has said it will appeal the decision to the Court of First Instance in Luxembourg, which may well drag on for several years. It has 60 days in which to appeal.

Whilst the fine itself is unlikely to make much of a dent in the company's reported $50 billion cash pile, the ruling is likely to open it to other legal actions and constrain it's freedom to bundle software in future.