"The Game"Evolution
03-24-2004, 04:45 AM
EU Hits Microsoft With Record Fine
By PAUL GEITNER, AP
BRUSSELS (March 24) - The European Union declared Microsoft Corp. guilty of abusing its ''near monopoly'' with Windows to foil competitors in other markets and hit the software giant with a record fine of $613 million Wednesday.
Getty Images
The European Union says Microsoft must offer a stripped-down version of Windows that doesn't include its Media Player.
The EU's antitrust authority said that ''because the illegal behavior is still ongoing,'' it was also demanding changes in the way Microsoft operates in Europe with the aim of improving competition globally. The EU edict goes well beyond the 2001 U.S. antitrust settlement.
It gave Microsoft 90 days to offer European computer manufacturers a version of Windows without the company's digital media player, which lets computer users watch video and listen to music and is expected to be an important market as multimedia content becomes even more pervasive in coming years.
The panel also chastised Microsoft for trying to ''shut competitors out of the market'' in software for office servers, by hoarding code that would help competing programs work smoothly with Windows computers. Microsoft now has 120 days to provide rivals in the server market with such code.
EU Competition Commissioner Mario Monti said the ruling was ''proportionate'' and ''balanced,'' and said ''dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition.''
''We are simply ensuring that anyone who develops new software has a fair opportunity to compete in the marketplace,'' he told a news conference.
More On This Story
Bad Remedy for Microsoft?
Get Stock Quote: MSFT
Discuss: Microsoft
Monti said he decided to limit the order to Europe ''in deference to the competition authorities of the United States and other countries.''
''We could legally have imposed explicitly a worldwide geographic scope, given the global nature of these markets,'' he said. ''We have not done so.''
He said limiting it to Europe ''will not unduly undermine the effectiveness of the remedies,'' given the size of the European market. Microsoft, which had $32 billion in revenue last year, does about 30 percent of its business in Europe.
Settlement talks with Microsoft broke down last week over the EU's insistence that any deal also restrict what features could be added to future versions of Windows, such as a better search engine. The Commission is already investigating a complaint filed by competitors against the latest version, Windows XP.
''Microsoft believes a settlement would have been better for European consumers,'' Microsoft spokesman Tom Brookes said in Brussels.
The company has said it would appeal and has just over two months to do so. It is also expected to ask the EU's Court of First Instance to suspend the order during the appeal, which could take years.
From AOL Search
More on Microsoft
Microsoft was found guilty of similar monopolistic behavior in the U.S. case, but the EU order strikes deeper than the U.S. settlement because it aims at the heart of Microsoft's business strategy - regularly adding new features to Windows to help sell upgrades.
The Redmond, Wash.-based company argues such ''bundling'' benefits consumers. But rivals call it unfair competition, given that Windows runs more than 90 percent of personal computers worldwide.
The EU regulators were concerned that such bundling ''deters innovation and reduces consumer choice in any technologies which Microsoft could conceivably take an interest in and tie with Windows in the future.''
For example, the EU said it was concerned that a stranglehold on media players could let Microsoft dictate future industry standards for how digital music and video files are encoded, distributed and played.
Under the EU order, Microsoft would could continue selling a version of Windows with its media player software installed, but it must refrain from ''any commercial, technological or contractual terms'' that would make the stripped-down version of Windows less attractive or a poorer performer.
Fearing that attempts to set prices would be overturned in court, the Commission did not order Microsoft to make the stripped-down version available at a discount. But it said Microsoft could not offer PC makers a better deal for buying the version of Windows with Microsoft's media player included.
That part of the ruling could boost rival makers of media software, led by RealNetworks Inc. and Apple Computer Inc., and promote innovative startups in the nascent market.
The other half of the case involved low-end servers, which tie desktop computers together in offices.
Silicon Valley-based Sun Microsystems Inc. complained to the EU in 1998 that Microsoft refused to provide proper details needed for Sun products to ''talk'' to Windows computers as efficiently as Microsoft's own server software could.
The Commission said its investigation revealed Microsoft's refusals to disclose server software code ''were part of a broader strategy designed to shut competitors out of the market.'' The risk, the Commission said, was that Microsoft's dominant position would end up ''eliminating competition altogether.''
The ruling said Microsoft could get ''reasonable remuneration'' for disclosing its proprietary software code, and added that the Windows source code itself would remain untouched.
The EU also said it would appoint a trustee to monitor Microsoft's compliance with the ruling.
The fine against Microsoft, 497 million euros, surpassed the EU's 2001 penalty of 462 million euros against Hoffman-La Roche AG for acting in a cartel. Money from the fine would be redistributed to the EU member states.
AP-NY-03-24-04 0736EST
Copyright 2004 The Associated Press.
Makes me wonder if this will have any effect on the future of the Xbox and its predessesor? What do you guys think?
By PAUL GEITNER, AP
BRUSSELS (March 24) - The European Union declared Microsoft Corp. guilty of abusing its ''near monopoly'' with Windows to foil competitors in other markets and hit the software giant with a record fine of $613 million Wednesday.
Getty Images
The European Union says Microsoft must offer a stripped-down version of Windows that doesn't include its Media Player.
The EU's antitrust authority said that ''because the illegal behavior is still ongoing,'' it was also demanding changes in the way Microsoft operates in Europe with the aim of improving competition globally. The EU edict goes well beyond the 2001 U.S. antitrust settlement.
It gave Microsoft 90 days to offer European computer manufacturers a version of Windows without the company's digital media player, which lets computer users watch video and listen to music and is expected to be an important market as multimedia content becomes even more pervasive in coming years.
The panel also chastised Microsoft for trying to ''shut competitors out of the market'' in software for office servers, by hoarding code that would help competing programs work smoothly with Windows computers. Microsoft now has 120 days to provide rivals in the server market with such code.
EU Competition Commissioner Mario Monti said the ruling was ''proportionate'' and ''balanced,'' and said ''dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition.''
''We are simply ensuring that anyone who develops new software has a fair opportunity to compete in the marketplace,'' he told a news conference.
Bad Remedy for Microsoft?
Get Stock Quote: MSFT
Discuss: Microsoft
Monti said he decided to limit the order to Europe ''in deference to the competition authorities of the United States and other countries.''
''We could legally have imposed explicitly a worldwide geographic scope, given the global nature of these markets,'' he said. ''We have not done so.''
He said limiting it to Europe ''will not unduly undermine the effectiveness of the remedies,'' given the size of the European market. Microsoft, which had $32 billion in revenue last year, does about 30 percent of its business in Europe.
Settlement talks with Microsoft broke down last week over the EU's insistence that any deal also restrict what features could be added to future versions of Windows, such as a better search engine. The Commission is already investigating a complaint filed by competitors against the latest version, Windows XP.
''Microsoft believes a settlement would have been better for European consumers,'' Microsoft spokesman Tom Brookes said in Brussels.
The company has said it would appeal and has just over two months to do so. It is also expected to ask the EU's Court of First Instance to suspend the order during the appeal, which could take years.
From AOL Search
More on Microsoft
Microsoft was found guilty of similar monopolistic behavior in the U.S. case, but the EU order strikes deeper than the U.S. settlement because it aims at the heart of Microsoft's business strategy - regularly adding new features to Windows to help sell upgrades.
The Redmond, Wash.-based company argues such ''bundling'' benefits consumers. But rivals call it unfair competition, given that Windows runs more than 90 percent of personal computers worldwide.
The EU regulators were concerned that such bundling ''deters innovation and reduces consumer choice in any technologies which Microsoft could conceivably take an interest in and tie with Windows in the future.''
For example, the EU said it was concerned that a stranglehold on media players could let Microsoft dictate future industry standards for how digital music and video files are encoded, distributed and played.
Under the EU order, Microsoft would could continue selling a version of Windows with its media player software installed, but it must refrain from ''any commercial, technological or contractual terms'' that would make the stripped-down version of Windows less attractive or a poorer performer.
Fearing that attempts to set prices would be overturned in court, the Commission did not order Microsoft to make the stripped-down version available at a discount. But it said Microsoft could not offer PC makers a better deal for buying the version of Windows with Microsoft's media player included.
That part of the ruling could boost rival makers of media software, led by RealNetworks Inc. and Apple Computer Inc., and promote innovative startups in the nascent market.
The other half of the case involved low-end servers, which tie desktop computers together in offices.
Silicon Valley-based Sun Microsystems Inc. complained to the EU in 1998 that Microsoft refused to provide proper details needed for Sun products to ''talk'' to Windows computers as efficiently as Microsoft's own server software could.
The Commission said its investigation revealed Microsoft's refusals to disclose server software code ''were part of a broader strategy designed to shut competitors out of the market.'' The risk, the Commission said, was that Microsoft's dominant position would end up ''eliminating competition altogether.''
The ruling said Microsoft could get ''reasonable remuneration'' for disclosing its proprietary software code, and added that the Windows source code itself would remain untouched.
The EU also said it would appoint a trustee to monitor Microsoft's compliance with the ruling.
The fine against Microsoft, 497 million euros, surpassed the EU's 2001 penalty of 462 million euros against Hoffman-La Roche AG for acting in a cartel. Money from the fine would be redistributed to the EU member states.
AP-NY-03-24-04 0736EST
Copyright 2004 The Associated Press.
Makes me wonder if this will have any effect on the future of the Xbox and its predessesor? What do you guys think?