EU to slap record fine on Microsoft

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Last updated at: (Beijing Time) Wednesday, March 24, 2004

EU to slap record fine on Microsoft

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The European Commission (EC), the executive arm of the European Union (EU), is set to slap a record fine of nearly 500 million euros (about 600 million US dollars) against the US software giant Microsoft, said an online newsletter EUobserver Tuesday.

The EC said last week that it would slap sanctions on Microsoft because it believes that the company is abusing its dominant market position and break EU competition laws. The last decision would be announced by EU Competition Commissioner Mario Monti on Thursday.

The fine is expected to be 497 million euros (about 597 million dollars), significantly larger than the 460 million euros (about 540 million dollars) fine imposed on German pharmaceutical company Roche for its part in a price-fixing operation in the Vitamin market.

However, the fine is not likely to cause too much pain for the software giant, which holds 50 billion euros (60 billion dollars) in cash.

But additional "remedies" for the unfair competition situation are likely to affect the company more.

The EC is expected to demand that Microsoft offer two different versions of its Windows operating system - one without its media player - which allows users to download music and videos from the internet.

This will satisfy the EU's concern that Microsoft's practice of "bundling" its media player with the operating system is unfair to competitors.

In a further blow to the company's business model, Microsoft will likely have to reveal its secret source code, which will reduce its dominance over rivals in the market for servers.

This will not be the last chapter in this lengthy saga, which has been in progress for five years. Microsoft, which said the fine was inappropriate, is widely expected to appeal against the decision, which could drag the case out for up to two more years.

Source: Xinhua

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