A new year, new charges from the EU against Microsoft
Just weeks after the New Year’s celebrations ended, the European Union’s European Commission has issued a fresh round of accusations against Microsoft. Likely inspired by past successes which saw the EU reaping $1.4B USD (899M €) in its latest fine against Microsoft, the pair is getting ready to wage battle in the European Union’s courts yet again.
The EU released a statement Friday stating, “Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice.”
Microsoft is currently reviewing the statement and deciding whether to fight the charges by requesting a formal hearing. It has been given an eight week deadline to reply to the charges. In the past Microsoft has had little success fighting the EU, with its appeals against fines consistently failing.
While Microsoft has diversified substantially, with revenue from internet business, the Xbox 360 gaming console, the Zune MP3 player, and more, the company’s biggest business remains its operating systems. While Microsoft has tried to move away from bundling its software with the OS’s to avoid being charged with anticompetitive practices, it has failed to do so with its Internet Explorer software.
It’s hard to argue the effectiveness of Microsoft’s strategy. Internet Explorer maintains a relatively large lead over second place competitor Firefox, with a 59.5 percent market share in Europe compared to Firefox’s 31.1 percent. While part of this is due to Microsoft’s advantages over Firefox in a large business environment, much of it is simply due to the fact that the software comes with every Windows install. This practice, says the EU, while effective, is anticompetitive.
The last fine against Microsoft came in February 2008. The fine and future fines to come from the European Commission saying Microsoft willfully ignored a 2004 ruling, which ordered it to cease certain anticompetitive practices. As the result of these violations, Microsoft is under extended oversight, and now looks to be headed for even more fines.
The most recent charges were spurred by a complaint from Norway’s Opera browser company. Some analysts are noting that the timing of the latest charges is rather odd, as Internet Explorer is at its lowest market share in several years. Further, while the U.S. focused on IE in antitrust charges in the late 90s, the EU has for several years declined to focus on it, instead targeting Microsoft’s bundling practices in general.
While Microsoft may be a bit morose over the fact that more antitrust charges have been dropped on it, it can take comfort in that at least it is not alone. The European Commission, which practices a stricter brand of antitrust law than the U.S., has targeted Intel and even Apple with separate charges or accusations. However, those charges fall short of those leveled at Microsoft, which has proved the EU’s favorite source of antitrust fine revenue over the years, being forced to pay over $2.4B USD in fines.