EU hits Microsoft with $357 million fine

Even though we've resigned ourselves to the fact that Windows Vista isn't coming out until it's good and ready, EU regulators aren't as forgiving as us when it comes to Microsoft playing the delay game, and have hit the software giant with a $357 million fine based on that 2004 anti-competition ruling. What's more, EU Competition Commissioner Neelie Kroes has decided to slap the company with a three million euro-per-day fine starting on July 31st if the document disclosure stipulation of the original decision -- which requires Microsoft to make the Windows source code more accessible to rivals provide technical information to makers of competing server software -- has not been fulfilled. Redmond, for its part, claims that it has been fully cooperating with regulators; general counsel Brad Smith argues that the commission's original demand was too vague, and therefore the issue is not one of compliance but clarity. In the end, Microsoft can complain all day and night about unfair rulings and unclear requirements, but if it wants to continue having unfettered access to the lucrative European market, it seems the company has little choice but to toe the line on this one.

[marius @ Jul 12th 2006 12:51PM]

YES! Pay up!

[Michael @ Jul 12th 2006 12:51PM]

Wow I don't know what to think of this. On one hand MS is a big empire and on the other they are just a company trying to do business. Being slapped with huge fines simply because they're successful.

If this eventually leads to microsoft opening up it's code to everyone so all OS's can us windwos programs that would be good I'd think. But I hope we don't regret it. I hope we don't end up with a bunch of OS's that can't talk to each other and cause all kinds of compatability issues.

[Gowtham Mahalingam @ Jul 12th 2006 12:56PM]

is anyone else getting the cryokennel advertisment from madeineureka for a suspended animation pet transporter ... shouldnt there be some monitoring for the type of advertising shown on engadget? i got a great laugh out of the advert

[Torontoguy @ Jul 12th 2006 12:58PM]

$357 million...pocket change...if it shuts the whiners up..it is probably worth it.

[GitsLM @ Jul 12th 2006 1:01PM]

This article does not reflect the real situation. The Eu wants MS to deliver details to the interfaces to gain access to windows servers. Nobody wants them to deliver the whole source code. Additionally they are supposed to deliver a windows without integrated media player. Maybe the engadget writers should do better research when writing those articles. A better source of information to this topic is http://www.heise.de/newsticker/meldung/75137
but unfortunatelly it is in German :) Europeans love competition but we do not like companies trying to do whatever they want.

[Stephen @ Jul 12th 2006 1:04PM]

Well why would Microsoft want to release source code that cost them millions to develop to competing companies. That would be like Pepsi telling it's competitor how to make sodas.

[KawF @ Jul 12th 2006 1:11PM]

Does this mean that the Xbox 360 will become more expensive to make up for this loss? Is the Xbox 360 doomed now?

[Ahkum @ Jul 12th 2006 1:20PM]

Wow, what whiners the EU are. "Wah, we want an OS without that evil media player that ruins peoples' lives! And we want to know how you programmed your O/S so we can get a cheap knockoff in a few years."

[trout-101 @ Jul 12th 2006 1:23PM]

"Being slapped with huge fines simply because they're successful."

They were convicted here in the U.S. by the courts and in EU by it's commision, which was upheld by the european courts.

They are being slapped by fines for not complying with the orders to disclose interface documentation not any source code. It's a huge(maybe not for MS) fine because it's being applied retoractively.

Instead of complying, Microsoft tried to get the EU courts to invalidate the commision's decree. They took a gamble and lost.

[lolersticks @ Jul 12th 2006 1:24PM]

They don't charge $$$ a day because they come with their own integrated radio. Windows Media Player is actually easier to replace in a computer than a stock deck in a vehicle. And replacement is free with the computer. (I say replace, not remove, but with software, it doesn't really make a difference)

[Steve @ Jul 12th 2006 1:38PM]

I think it would be hilarious if Microsoft would just close all their offices and research facilities in EU countries and stop selling Windows there. Imagine how businesses there would react to having to open an office outside of the EU just to do business with Microsoft and buy their products.

Nobody is forcing anyone to buy a Microsoft product, and Windows is certainly not required to operate a computer. Requiring Microsoft to give its source code is silly, and making them remove media player is sillier, given that you can use whatever you want to play video.

[Loonie @ Jul 12th 2006 1:40PM]

Teh onion-eating freedom haters want to destroy Microsoft and pirate Windows!

It's great to see so many posters with such a firm and well-informed grasp of what this case is about.

[JC @ Jul 12th 2006 1:42PM]

Stupid. Why would a company not want as many people to use as many of their products as possible? We don't see Google being fined for trying to affect everything we do onthe Internet, do we? All this anti-MS sentiment, when any business in their right mind would do exactly the same thing MS did.

[Jesse @ Jul 12th 2006 1:44PM]

I personally think that Microsoft should just say "Screw You" to the European Union and say that they aren't going to ship their products to the EU anymore and stop support there. I'm sure the people living in the EU would get pretty pissed off at the EU, especially the big businesses, changing how the EU is treating Microsoft.

[SRD @ Jul 12th 2006 1:46PM]

Why should microsoft pay anything. They spent the money to develop the software. Why should they make it easy for other companys. Those other companys should spend the research money to get their software to run well on windows. And whats wrong with MS putting free features like media player and IE. I want the most for my money. if those companys want to cry they cant compete with free. maybe the need a new bussiness plan like the rest of the corporations out there. once its not profitable for MS to do OSes because of this they will move to other things and we will be screwed by no standards.

[Jim Summers @ Jul 12th 2006 1:47PM]

Microsoft isn't being punished for its success, it is being punished for the criminal activities that were partly responsible for that success. We expect that successful shoplifters and murderers will be punished for their success; what Microsoft has done may not be as serious, but it was still against the law.

I'm sure plenty of people beleive we don't need the law to control Microsoft; but the free market isn't going to do it. The free market doesn't benefit consumers unless there is competition, otherwise companies will just increase profits rather than lowering prices for consumers. Microsoft doesn't have much competition; so this EU punishment, which aims to increase that competition, seems like a reasonable punishment for illegally eliminating competition.

I find this whole situation highly ironic. Microsoft wouldn't have any business at all if not for the enforcement of copyright laws. You'd think a company that owes its existence to a law would have more respect for laws in general.

[LinExt @ Jul 12th 2006 1:52PM]

1 sue towards microsoft = apples whole bank..
i feel sorry for microsoft they are hated on by many people i love their operating system and office suite is so fucking great i dont care what anybody have t osay.

i use linux (suse) and mac os x tiger at home and i also have a windows xp computer and windows just freaking rocks..

i love the fact that i can go to any store pick up any hardware i want and i know it will be compatbile.

the eu is just a bunch of crying little babys always looking into digging into a succesful companys pockets and sue them for some stupid shit.

GO MICROSOFT I SUPPORT YOU TILL THE END.

[dave @ Jul 12th 2006 2:01PM]

*toe* the line?
Is that like when you draw a line in the sand with your toe and dare someone to cross it?

[E71 @ Jul 12th 2006 2:02PM]

Solution: Pull all Microsoft products from Europe. They're too whiney anway. Use yer own damn O/S ye stinkin' Europeans! :p

[The Snapple @ Jul 12th 2006 2:02PM]

thank god i live in norway (its in europe, but not in the EU)

holy hell... why don't they make coca-cola put their recipe on the net...

good god how stupid can someone get... i bet this is a french idea...

[shirizaki @ Jul 12th 2006 2:03PM]

New computer:
- connect internet
- download firefox, opera, etc.
- download choice media player

or keep what's on there. Honestly, what do you expect people to play their MP3 files on a stock windows system with? What do you expect to browse the internet with to get those programs?

I hate WMP and IE with a passion, so I download whatever programs I want. You can compete, just compile something better.

MS is the biggest, blah blah blah. Aside from linux and OSX, I don't see any person developing a better OS and trying to market it.

[Prateek @ Jul 12th 2006 2:10PM]

And what law has Microsoft broken, Jim Summers?

Microsoft paid for and developed their code and OS, its thiers and theirs alone. If someone else wants to be Microsoft, do it the hard way.

Ohh, boo hoo! Diamler Chrysler has all the car technology, and they won't share it with me. I just want to make a car company to start some compeition in the free market, go after them, EU!!!

This is total BS, I agree with Jesse, Microsoft should give a big FU to the EU and pull their product. Then what?

[Mike @ Jul 12th 2006 2:15PM]

The point of the case against microsoft is also that they are trying to obfuscate their interfaces to make it harder for software developers to create programs for windows. They are using their monopoly in one area to dominate another. This is illegal in the EU (and probably the US but they don't seem to have the guts to hold up court rulings.)

I'd really like to hear the opinion of the Microsoft fanboys on this issue.

After all, if they write such great programs, why do they fear the competition?

Mike

[flamer's grill @ Jul 12th 2006 2:18PM]

Do they sell Apple computers in Europe? If they do, don't they come with an integrated media player? Call your lawyers, time for more money!

[mcepat @ Jul 12th 2006 2:22PM]

ya they already tried the windows think with no media player Windows XPN Guess what? Not one person bought it, this means the EU is out of touch.

If Apple can have there systems with a photo, music player etc tied heavily to the OS then why can't MS?

Someone will quickly reply, becuase Apple makes there own hardware and software so they can.

I would respond I wish Microsoft took the XBOX teram and started making there own hardware just like Apple does and do exactly what Apple does, they say screw you when it comes to bundled applications.

EU? when are you going to sue Apple for bundling ITUNES?

And I don't recall seeing any Apple disclosures about there OS code.

Its loosely based on UNIX actually they did a great job stealing from UNIX and LINUX and calling it open when its blandly propieritary

[elly @ Jul 12th 2006 2:26PM]

this has nothing really to do with the lawsuit described, but i found it amusing. i'm beta testing a long awaited os, and every time i load the integrated browser, the browser crashes after about 5 seconds.

hence, i stick with firefox.

i agree with some of the earlier posts: if ms just pulled their product, that should end the eu's problems with them. *smirk*

[Anonymous @ Jul 12th 2006 2:41PM]

"This is total BS, I agree with Jesse, Microsoft should give a big FU to the EU and pull their product. Then what?"

It'd never happen, so there is no 'then what?' :P

Summers hit the nail on the head with this one, the EU is protecting the CONSUMERS, it's stopping Microsoft from using it's power to dominate in many different markets (thus being able to inflate prices).

Your either going to agree with it or not, but the EU is looking out for the consumers by stopping illegal activities - just because it's microsoft doesn't mean the EU should change it's laws to work around them...that's what America is for ;)

[RJR @ Jul 12th 2006 2:42PM]

I must be missing an awful lot on this one...

1. Why does Microsoft owe the EU anything at all? They're coming up with an OS to sell. Was there some sort of purchase contract between Microsoft and the EU?

2. What happens if microsoft refuses to pay? Then what can the EU do?

I'm not the biggest fan of microsoft or their products, but I really just don't understand what the problem is here on this one. It's MS's OS, why should they have to disclose their information to competitors?

[Jeff Banks @ Jul 12th 2006 2:44PM]

Evidencing the greed of the EU in trying to finance their socialist empire by feeding off of American companies.

[Psycho Joe @ Jul 12th 2006 2:50PM]

I can't belive some of the rascist comments I'm reading!

They don't the whole source code, just enough so they can write more compatible software. People don't have a choice anymore, sure you can get WinAmp and Firefox, but they dont work on the MS only stuff. That is the problem. I'm glad MS is getting sued, they deserve it.

And to the people who want MS to pull out of the EU market: They need the EU market. End of story. They need it more right now then the US market.

[rahrens @ Jul 12th 2006 2:54PM]

No, Apple's iLife programs (iPhoto, iTunes, iWeb, iDvd, GarageBand) are NOT closely tied into the OS. They are easily removed by anyone that doesn't want to use them, and there ARE competing programs out there that do the same thing.

Don't like QuickTime? Then download Micro$oft's Media Player for the Mac. Apple doesn't try to make you use QT if you don't want to.

That's the difference - M$ makes it difficult for competitors to make competing apps, and that difficulty has made it easier for M$ to become a monopoly. It is their reluctance to comply with the EU's orders that have resulted in this fine.

Again - like posted earlier - the orders do NOT apply to source code - only to API documentation to allow third party mfrs to write software that will work with Windows as well as M$'s own apps do.

No, the Eu will not sue Apple for bundling iTunes. They are not sueing M$ for bundling anything - just for anti-competitive practices that are illegal.

Face it, M$ is a monopoly, and is using illegal tactics to maintain that monopoly. THAT is what is illegal, like it or not. M$ fanboys just need to recognize that fact and move on.

[AlanJC @ Jul 12th 2006 3:06PM]

INTARDNET!

Got to love an environment where the mentally challenged can post opinions based on PURE INTERNET fact, as opposed to spending ten minutes reading the real facts.

Still, I suppose it proves the gene pool needs more chlorine.

The case is not about all the source code, or just media player, it's all about compatibility, and access to APIs that mean people can write software that will work, without being forced to pay MS megabucks for certification, and partner programmes.

Get a clue kiddies.

[Alex K. @ Jul 12th 2006 3:16PM]

There is no reason why the EU should be fining Microsoft.

#1 Bundled media players are necessary to compete with competitors like Apple and Linux based systems.
#2 Microsoft is NOT a monopoly, since Apple and Linux both compete. There are commercial Linux distros, 60% of the world's web pages are hosted on Linux, 10% of computers either use Mac or Linux, Microsoft is in the lead but there are global companies competing with it.


Okay let's say you un-bundle IE. HOW THE HELL ARE YOU SUPPOSED TO DOWNLOAD ANOTHER WEB BROWSER WITHOUT FIRST HAVING IE INSTALLED IN THE SYSTEM???

Let's let Microsoft's competitors bundle whatever the hell they want, though!

I'm actually mostly a machead, and I don't like Microsoft's products, but credit is due to them for really investing their own money and talent into their OS, and it's theres, and it's not the EU's job to water it down or give away its code unless Microsoft is in a true monopoly, which it's NOT.

[Alex K. @ Jul 12th 2006 3:21PM]

And about APIs and code for developers, how many developers do you see out there having trouble writing programs for windows? Yeah, how about zero. The EU can't pull this crap out of nowhere when Windows has hundreds of thousands of programs written for it, more than any other OS.

[The Snapple @ Jul 12th 2006 3:21PM]

if ms want money for certification thats their choice... then those programmers could just develop for mac or linux in stead

jeez... i would screw the little guy as much as ms if i was in there position

[John @ Jul 12th 2006 3:34PM]

The EU doesn't care about the consumers when they talk about competition. They care about the competitors. They want to keep competitors in business. When someone succeeds then another probably fails. They are protecting the companies that fail (competition).

[Sean @ Jul 12th 2006 3:44PM]

"jeez... i would screw the little guy as much as ms if i was in there position"

Good god, The Snapple, I hope that that was sarcasm, or else you have my vote for most ironic post of the year.

The point of a free market economy is that all competition has the same ability to generate revenue. Microsoft has stiffled this competition so they get fined.

It's not the fault of the French, even though President Bush would have you believe that. Goddamn French they eat frogs and laugh like frogs, blah blah blah. And Americans looked like stuffed capitalist pigs (quite literally).

None of this has anything to do with this issue so please keep your prejudicial crap to yourselves and argue the issue at hand. Read the article and quit with the knee-jerk stereotypes.

[pr0n* @ Jul 12th 2006 3:59PM]

Mike sez-
...make it harder for software developers to create programs for windows.

Actually, the latest release of visual studio makes it easier than ever to develop an application for windows.
So, sorry mike. you sir are misinformed

douche.

[Jesse @ Jul 12th 2006 4:02PM]

I don't get how it is so hard to write software to work on Windows. I know plenty of people that do it. There are all kinds of programs written by college students and some people who don't even have formal training. If you want to write a program, get the SDK and write the program. If you can't get the program to work then maybe it is your own fault for being a crappy programer. If Windows was really that hard to code for then there wouldn't be millions of third party programs, apps, and games.

[cody @ Jul 12th 2006 4:13PM]

No one is talking about pulling InternetExplorer from Windows.
It can't be done anyway, sinc eit's heavily tied into the operating system since Windows 98.

I haven't read into the Media Player and source code issue, so I won't comment on that. However, I do know that the EU is not seeking total opening of the Windows source code to competitors.

And to whoever asked the question of what the EU was going to do if Microsoft wouldn't pay: Ban their products in every country in the European Union.
That probably wouldn't be good for either companies in the EU, or Microsoft but business in Europe would not break down all of a sudden. Microsoft's profits on the other hand would.
So that would be a rather effective action. Not pretty but effective.


Oh, and I'd recommend people to stop their anti-Europe/anti-France propaganda. Nobody with even the slightest clue is gonna take you serious with that crap.

[Dre @ Jul 12th 2006 4:16PM]

It is intersting to see that there is one sentiment that is even stronger than the hate against Microsoft and that is nationalism.

[austinkennethlee @ Jul 12th 2006 4:39PM]

So . . . doesn't this open a pretty big security hole? Not that Microsoft hasn't been absolutely dapper about providing them by the truckload already, but it appears to me that this is screen door on a submarine silly.

[Gr1zz @ Jul 12th 2006 4:43PM]

What if I dont want MS competitors to have the source code to what I run on my servers...

[astutefool @ Jul 12th 2006 4:47PM]

Wow. It dosen't seem to have been mentioned here. But if you add the 280 million euro fine which was just for DEFYING the 2004 anti-trust ruling, to the original 497 million fine, you get a total of 770 million euros which is nearly A BILLION DOLLARS. That is a mind blowing sum of money by anyones standards but Microsoft themsleves chose to exacerbate the situation by defying the ruling. The EU is right, no company is above the law and that includes Microsoft. I am suprised to see that many Engadget readers have taken this ruling by the EU as an attack on America, and bemused by the fact that while bumbling around for some kind of racist retort the chose to insult France showing there acute lack of knowledge about the EU and lack of education.
P.S. If Microsoft ceased trading in the E.U. they would lose far more than a billion dollars then maybe everyone would use MAC OSX, which would lower our cortisone levels

[bob @ Jul 12th 2006 4:54PM]

Okay, that’s the second time some one has mentioned racist criticism. Which “race” in particular are we talking about here? Just curious.

[meridian506 @ Jul 12th 2006 5:00PM]

It is a falicy that the EU believes in the free market economy. If it did, it wouldn't subsidize member countries' farmers to the tune of $60bn a year just so that non EU farmers' goods cannot compete.

[astutefool @ Jul 12th 2006 5:06PM]

Hello bob...
in response to: 'Which "race" in particular are we talking about here?"
specific quote - "i bet this is a french idea..." I think the insinuations are clear enough.

Perhaps we should reclassify it as xenophobia, but then only 5% of people here would know what I am talking about, eh bob?

[Mischa @ Jul 12th 2006 5:12PM]

Microsoft's stance is that they are being victimized- and I tend to agree without claiming they acted completely within the law. They already have spent thousands of hours/$ trying to comply, yet the EU changes or reclarifies what exactly they need to come up with. The fine amount is just too gigantic- are they saying Microsoft has profited that much by making it HARD TO WRITE WINDOWS APPZ? Crap, last I checked there were billions of windows appz out there, and MANY other companies make a good living out of interfacing with windows. You don't see Adobe unable to progam based on some lacking documentation.

And, yes most of it revolves around the stupid media player- and as someone said they provided a non WMP (N) version and noone went for it.

My question is- what does the EU spend their 1 billion $ tax on the USA on? Are they going to improve anything for the consumer here, or just the gold plated appointments in their offices?

As for France, sorry, but they love to shut the entire country down just to prove a point... so on my Euro vacation when we couldn't even get in the country as all air traffic, train, and bus workers went on strike, we skipped France and took our Euros with us, wondering what the hell they were thinking...

Now I am no jingoist, I love Europe, but the Euro-Zone just doesn't get free market capitalism, and Europe's economy will continue to lose out until they loosen up.

Anyone ignoring the truths just because they despise M$ should be afraid of the backlash against innovation and how it applies to other companies... that Apple is looking pretty closed and proprietary to me!

[bob @ Jul 12th 2006 5:14PM]

Why would only 5% of the people on this board know what xenophobia means? Do tell.

[Tracy L @ Jul 12th 2006 5:24PM]

I'm just amazed when I read all the relatively uninformed quotes. Not from the uninformed and opinionated people because I consider myself one of those. But instead from the holier-than-thou people calling the first ones stupid and racist.

But not one to miss out on the fun here's my 3 cents (2 euros):

1) France is a country, not a race. (bob beat me to asking this one)

2) You CAN remove IE from Windows regardless of MS's whining that it is "integral". Part of an older court case involved an expert demonstrating how to do it.

3) How would I download Firefox/Opera/Netscape without IE pre-installed? With a copy on a CD or I would just FTP the file.

4) The original article did us a dis-service by not detailing the nature of the lawsuit requirements, which has led to many comments about "handing over source code" and then "I know ### people writing software for windows". I will guess that the nature of the lawsuit goes way back to the court ruling that made MS semi-divide it's application dev office from the OS office. The claim was that MS was providing APIs that allowed mediocre performance while the MS Office developers were using their "back door" access to perform operations much more efficiently. The result? MS Office ran much faster than competing software. Was this truly happening? I have no idea. But I remember it was a critical point in one of the many anti-MS court cases. I predict (but admit I don't know) that the EU lawsuit is based on similar complaints: MS is not sharing sufficient details so competitors can make "fairly" competitive products.