- The Washington Times - Thursday, February 28, 2008

BRUSSELS (AP) — The European Union’s longest-running fight with Microsoft Corp. neared an end yesterday as regulators imposed a record $1.3 billion fine on the world’s largest software company for failing to fully comply with a 2004 antitrust order.

Microsoft has not decided whether to appeal the penalty, which amounts to a fraction of the $14.07 billion it earned in fiscal 2007. In all, the company has been fined just under $2.4 billion by European antitrust regulators over the years.

Barring an appeal, the fine shuts the door on an investigation triggered by a 1998 complaint by Sun Microsystems.

It purported Microsoft was refusing to supply information that servers need to work with its market-dominating Windows operating system.

Microsoft eventually made the information available to rivals, but the EU said the company charged “unreasonable prices” until last October.

EU Competition Commissioner Neelie Kroes said Microsoft now appears to have finally complied with the 2004 EU antitrust order. But she warned that the company was not yet in the clear because the EU last month launched new probes into its Office software and Windows’ Internet browser.

The fine was meted out as Microsoft pursues its biggest acquisition to date; but Matt Rosoff, an analyst at the research group Directions on Microsoft, said it would have no effect on the software maker’s bid for Web portal operator Yahoo Inc.

“This is a fine for past behavior,” said Mr. Rosoff, unrelated to Microsoft’s offer for Yahoo, which was valued at $44.6 billion in early February.

Ms. Kroes also was skeptical over Microsoft’s announcement last week that it was further expanding its efforts to make its software work better with rival technologies. A press release, she said, “does not necessarily equal a change in business practice.”

“Talk is cheap. Flouting the rules is expensive,” she said.

Yesterday’s penalty far outweighs the next biggest fine — $613 million imposed on Microsoft for using its role as the world’s leading supplier of desktop software to elbow into new markets for work-group servers and media players.

Fines — which can reach as much as 10 percent of company’s global yearly revenue — are paid into the EU budget. It gives out farm subsidies and research grants. The European Commission asserts that antitrust fines ultimately help reduce the financial burden on European taxpayers.

Microsoft earned $14.07 billion on $51.12 billion in worldwide sales during its last fiscal year that ended June 30.

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