Microsoft says $615M EU fine 'inappropriate'
By Paul Geitner
Associated Press
BRUSSELS, Belgium — In a preview of its promised appeal, Microsoft Corp. accused the European Union yesterday of overreaching by including its U.S. business in calculating a record fine of about $615 million for alleged antitrust abuses.
With the EU decision on the software giant due today, trans-Atlantic tensions also began to sizzle as they did the last time the EU took on U.S. corporate giants and blocked General Electric Co.'s planned deal for Honeywell International Inc.
"This ruling is yet another example of the EU assaulting a successful American industry and policies that support our economic growth," said U.S. Sen. Patty Murray, a Democrat from Microsoft's home state of Washington.
Horacio Gutierrez, Microsoft's chief European lawyer, argued that the EU's reported fine appeared to be twice what it should have been under the European Commission's guidelines to account for the company's global operations. Microsoft does about 30 percent of its business in Europe.
"We believe it's unprecedented and inappropriate for the Commission to impose a fine on a company's U.S. operations when those operations are already regulated by the U.S. government," Gutierrez said. "The conduct at issue has been permitted by both the U.S. Department of Justice and a U.S. court."
The company also argued it could not have known its behavior would infringe EU law and thus it should not be fined at all.
Commission spokeswoman Amelia Torres declined to comment, saying EU Competition Commissioner Mario Monti would address questions today at a news conference after the commission adopts the ruling.
Sources familiar with the five-year-old case, speaking on condition of anonymity, say the EU ruling finds that Microsoft abused its Windows monopoly, harming consumers and competitors in the markets for digital media and server software.
Microsoft was found guilty of similar monopolistic behavior in the U.S. antitrust case but settled with the Bush administration in late 2001. A U.S. appeals court is considering whether that landmark deal was adequate to restore competition.
U.S. companies that do significant business in Europe also are subject to EU law, which authorizes the commission to levy fines for antitrust violations of up to 10 percent of a company's global revenue.
Representatives from the 15 EU governments approved the fine Monday.
A source familiar with the case, speaking on condition of anonymity, said yesterday that it was around $615 million. That would be a record for the EU in an antitrust case, but far below the maximum of around $3.5 billion that could be imposed in Microsoft's case.
Given that the company has cash reserves of nearly $53 billion, experts say the fine is less significant than the changes the EU competition commissioner is seeking in how Microsoft sells Windows, which runs most personal computers worldwide.
The EU is expected to order Microsoft to release more of the underlying Windows code to rivals in the server market, and deliver a version of Windows without its Windows Media Player software to help competing products reach desktops.
