European Union Microsoft antitrust case
Encyclopedia
The European Union Microsoft competition case is a case brought by the European Commission
of the European Union
(EU) against Microsoft
for abuse of its dominant position in the market (according to competition law
). It started as a complaint from Novell
over Microsoft's licensing practices in 1993, and eventually resulted in the EU ordering Microsoft to divulge certain information about its server products and release a version of Microsoft Windows
without Windows Media Player
.
said that Microsoft was blocking its competitors out of the market through anti-competitive practices. The complaint centered on the license practices at the time which required royalties from each computer sold by a supplier of Microsoft's operating system, whether or not the unit actually contained the Windows operating system. Microsoft reached a settlement in 1994, ending some of its license practices.
Sun Microsystems
joined the fray in 1998 when it complained about the lack of disclosure of some of the interfaces to Windows NT. The case widened even more when the EU started to look into how streaming media
technologies were integrated with Windows.
497 million ($
794 million or £
381 million), the largest fine ever handed out by the EU at the time, in addition to the previous penalties, which included 120 days to divulge the server information and 90 days to produce a version of Windows without Windows Media Player.
The next month Microsoft released a paper containing scathing commentary on the ruling including: "The commission is seeking to make new law that will have an adverse impact on intellectual property rights and the ability of dominant firms to innovate." Microsoft paid the fine in full in July 2004.
In 2004, Neelie Kroes
was appointed the European Commissioner for Competition; one of her first tasks was to oversee the fining brought onto Microsoft. Kroes has stated she believes open standards and open source
are preferable to anything proprietary
:
N." In response to the server information requirement, Microsoft released the source code
, but not the specifications, to Windows Server 2003
service pack 1 to members of its Work Group Server Protocol Program (WSPP) on the day of the original deadline. Microsoft also appealed the case, and the EU had a week-long hearing over it. Neelie Kroes
stated:
Microsoft stated in June 2006 that it had begun to provide the EU with the requested information, but according to the BBC
the EU stated that it was too late.
On 12 July 2006, the EU fined Microsoft for an additional €280.5 million (US$448.58 million), €1.5 million (US$2.39 million) per day from 16 December 2005 to 20 June 2006. The EU threatened to increase the fine to €3 million ($4.81 million) per day on 31 July 2006 if Microsoft did not comply by then.
On 17 September 2007, Microsoft lost their appeal against the European Commission's case. The €497 million fine was upheld, as were the requirements regarding server interoperability information and bundling of Media Player. In addition, Microsoft has to pay 80% of the legal costs of the Commission, while the Commission has to pay 20% of the legal costs by Microsoft. However, the appeal court rejected the Commission ruling that an independent monitoring trustee should have unlimited access to internal company organization in the future. On 22 October 2007, Microsoft announced that it would comply and not appeal the decision any more, and Microsoft did not appeal within the required two months as of 17 November 2007.
Microsoft announced that it will demand 0.4% of the revenue (rather than 5.95%) in patent-licensing royalties, only from commercial vendors of interoperable software and promised not to seek patent royalties from individual open source developers. The interoperability information alone is available for a one-time fee of €10,000 (US$15,992).
On 27 February 2008, the EU fined Microsoft an additional €899 million (US$1.44 billion) for failure to comply with the March 2004 antitrust decision. This represented the largest penalty ever imposed in 50 years of EU competition policy until 2009, when the European Commission fined Intel €1.06 billion ($1.45 billion) for anti-competitive behaviour. This latest decision follows a prior €280.5 million fine for non-compliance, covering the period from June 21, 2006 until October 21, 2007. On 9 May 2008, Microsoft lodged an appeal in the European Court of First Instance seeking to overturn the €899 million fine, officially stating that it intended to use the action as a "constructive effort to seek clarity from the court".
In its 2008 Annual Report Microsoft stated:
's OpenDocument
format support.
In January 2009, the European Commission announced it would investigate the bundling of Internet Explorer with Windows operating systems from Microsoft, saying "Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice." In response, Microsoft announced that it would not bundle Internet Explorer with Windows 7 E, the version of Windows 7 to be sold in Europe.
On December 16, 2009, the European Union agreed to allow competing browsers, with Microsoft providing a "ballot
box" screen letting users choose one of twelve popular products listed in random order. The twelve browsers were
Avant,
Chrome,
Firefox,
Flock
,
GreenBrowser
,
Internet Explorer
,
K-Meleon
,
Maxthon
,
Opera
,
Safari,
Sleipnir, and
Slim. which are accessible via BrowserChoice.eu
.
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
(EU) against Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
for abuse of its dominant position in the market (according to competition law
Competition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
). It started as a complaint from Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
over Microsoft's licensing practices in 1993, and eventually resulted in the EU ordering Microsoft to divulge certain information about its server products and release a version of Microsoft Windows
Microsoft Windows
Microsoft Windows is a series of operating systems produced by Microsoft.Microsoft introduced an operating environment named Windows on November 20, 1985 as an add-on to MS-DOS in response to the growing interest in graphical user interfaces . Microsoft Windows came to dominate the world's personal...
without Windows Media Player
Windows Media Player
Windows Media Player is a media player and media library application developed by Microsoft that is used for playing audio, video and viewing images on personal computers running the Microsoft Windows operating system, as well as on Pocket PC and Windows Mobile-based devices...
.
Initial complaints
In 1993, NovellNovell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
said that Microsoft was blocking its competitors out of the market through anti-competitive practices. The complaint centered on the license practices at the time which required royalties from each computer sold by a supplier of Microsoft's operating system, whether or not the unit actually contained the Windows operating system. Microsoft reached a settlement in 1994, ending some of its license practices.
Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...
joined the fray in 1998 when it complained about the lack of disclosure of some of the interfaces to Windows NT. The case widened even more when the EU started to look into how streaming media
Streaming media
Streaming media is multimedia that is constantly received by and presented to an end-user while being delivered by a streaming provider.The term "presented" is used in this article in a general sense that includes audio or video playback. The name refers to the delivery method of the medium rather...
technologies were integrated with Windows.
Judgment
Citing ongoing abuse by Microsoft, the EU reached a preliminary decision in the case in 2003 and ordered the company to offer both a version of Windows without Windows Media Player and the information necessary for competing networking software to interact fully with Windows desktops and servers. In March 2004, the EU ordered Microsoft to pay €Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
497 million ($
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
794 million or £
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
381 million), the largest fine ever handed out by the EU at the time, in addition to the previous penalties, which included 120 days to divulge the server information and 90 days to produce a version of Windows without Windows Media Player.
The next month Microsoft released a paper containing scathing commentary on the ruling including: "The commission is seeking to make new law that will have an adverse impact on intellectual property rights and the ability of dominant firms to innovate." Microsoft paid the fine in full in July 2004.
In 2004, Neelie Kroes
Neelie Kroes
Neelie Kroes is a Dutch politician of the People's Party for Freedom and Democracy . She served as a Member of the House of Representatives from 3 August 1971 until 28 December 1977 when she became State Secretary for Transport, Public Works and Water Management from 28 December 1977 until 11...
was appointed the European Commissioner for Competition; one of her first tasks was to oversee the fining brought onto Microsoft. Kroes has stated she believes open standards and open source
Open source
The term open source describes practices in production and development that promote access to the end product's source materials. Some consider open source a philosophy, others consider it a pragmatic methodology...
are preferable to anything proprietary
Proprietary software
Proprietary software is computer software licensed under exclusive legal right of the copyright holder. The licensee is given the right to use the software under certain conditions, while restricted from other uses, such as modification, further distribution, or reverse engineering.Complementary...
:
Follow-up
Microsoft has a compliant version of its flagship operating system without Windows Media Player available under the negotiated name "Windows XPWindows XP
Windows XP is an operating system produced by Microsoft for use on personal computers, including home and business desktops, laptops and media centers. First released to computer manufacturers on August 24, 2001, it is the second most popular version of Windows, based on installed user base...
N." In response to the server information requirement, Microsoft released the source code
Source code
In computer science, source code is text written using the format and syntax of the programming language that it is being written in. Such a language is specially designed to facilitate the work of computer programmers, who specify the actions to be performed by a computer mostly by writing source...
, but not the specifications, to Windows Server 2003
Windows Server 2003
Windows Server 2003 is a server operating system produced by Microsoft, introduced on 24 April 2003. An updated version, Windows Server 2003 R2, was released to manufacturing on 6 December 2005...
service pack 1 to members of its Work Group Server Protocol Program (WSPP) on the day of the original deadline. Microsoft also appealed the case, and the EU had a week-long hearing over it. Neelie Kroes
Neelie Kroes
Neelie Kroes is a Dutch politician of the People's Party for Freedom and Democracy . She served as a Member of the House of Representatives from 3 August 1971 until 28 December 1977 when she became State Secretary for Transport, Public Works and Water Management from 28 December 1977 until 11...
stated:
Microsoft stated in June 2006 that it had begun to provide the EU with the requested information, but according to the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
the EU stated that it was too late.
On 12 July 2006, the EU fined Microsoft for an additional €280.5 million (US$448.58 million), €1.5 million (US$2.39 million) per day from 16 December 2005 to 20 June 2006. The EU threatened to increase the fine to €3 million ($4.81 million) per day on 31 July 2006 if Microsoft did not comply by then.
On 17 September 2007, Microsoft lost their appeal against the European Commission's case. The €497 million fine was upheld, as were the requirements regarding server interoperability information and bundling of Media Player. In addition, Microsoft has to pay 80% of the legal costs of the Commission, while the Commission has to pay 20% of the legal costs by Microsoft. However, the appeal court rejected the Commission ruling that an independent monitoring trustee should have unlimited access to internal company organization in the future. On 22 October 2007, Microsoft announced that it would comply and not appeal the decision any more, and Microsoft did not appeal within the required two months as of 17 November 2007.
Microsoft announced that it will demand 0.4% of the revenue (rather than 5.95%) in patent-licensing royalties, only from commercial vendors of interoperable software and promised not to seek patent royalties from individual open source developers. The interoperability information alone is available for a one-time fee of €10,000 (US$15,992).
On 27 February 2008, the EU fined Microsoft an additional €899 million (US$1.44 billion) for failure to comply with the March 2004 antitrust decision. This represented the largest penalty ever imposed in 50 years of EU competition policy until 2009, when the European Commission fined Intel €1.06 billion ($1.45 billion) for anti-competitive behaviour. This latest decision follows a prior €280.5 million fine for non-compliance, covering the period from June 21, 2006 until October 21, 2007. On 9 May 2008, Microsoft lodged an appeal in the European Court of First Instance seeking to overturn the €899 million fine, officially stating that it intended to use the action as a "constructive effort to seek clarity from the court".
In its 2008 Annual Report Microsoft stated:
Related investigations
In May 2008, the EU announced it is going to investigate Microsoft OfficeMicrosoft Office
Microsoft Office is a non-free commercial office suite of inter-related desktop applications, servers and services for the Microsoft Windows and Mac OS X operating systems, introduced by Microsoft in August 1, 1989. Initially a marketing term for a bundled set of applications, the first version of...
's OpenDocument
OpenDocument
The Open Document Format for Office Applications is an XML-based file format for representing electronic documents such as spreadsheets, charts, presentations and word processing documents....
format support.
In January 2009, the European Commission announced it would investigate the bundling of Internet Explorer with Windows operating systems from Microsoft, saying "Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice." In response, Microsoft announced that it would not bundle Internet Explorer with Windows 7 E, the version of Windows 7 to be sold in Europe.
On December 16, 2009, the European Union agreed to allow competing browsers, with Microsoft providing a "ballot
Ballot
A ballot is a device used to record choices made by voters. Each voter uses one ballot, and ballots are not shared. In the simplest elections, a ballot may be a simple scrap of paper on which each voter writes in the name of a candidate, but governmental elections use pre-printed to protect the...
box" screen letting users choose one of twelve popular products listed in random order. The twelve browsers were
Avant,
Chrome,
Firefox,
Flock
Flock (web browser)
Flock was a web browser that specialized in providing social networking and Web 2.0 facilities built into its user interface.Earlier versions of Flock used the Gecko HTML rendering engine by Mozilla....
,
GreenBrowser
GreenBrowser
GreenBrowser is a freeware web browser based on Internet Explorer's core. GreenBrowser based upon the Trident rendering engine used in Internet Explorer....
,
Internet Explorer
Internet Explorer
Windows Internet Explorer is a series of graphical web browsers developed by Microsoft and included as part of the Microsoft Windows line of operating systems, starting in 1995. It was first released as part of the add-on package Plus! for Windows 95 that year...
,
K-Meleon
K-Meleon
K-Meleon is a web browser for the Microsoft Windows platform. Based on the same Gecko layout engine as Mozilla Firefox, K-Meleon uses native Windows application programming interface to create the user interface, instead of using Mozilla's cross-platform XML User Interface Language layer, and as...
,
Maxthon
Maxthon
Maxthon is a free web browser for Microsoft Windows. The latest release, Maxthon 3, supports both the Trident and the WebKit rendering engines....
,
Opera
Opera (web browser)
Opera is a web browser and Internet suite developed by Opera Software with over 200 million users worldwide. The browser handles common Internet-related tasks such as displaying web sites, sending and receiving e-mail messages, managing contacts, chatting on IRC, downloading files via BitTorrent,...
,
Safari,
Sleipnir, and
Slim. which are accessible via BrowserChoice.eu
BrowserChoice.eu
BrowserChoice.eu is a website that was created in March 2010 as the result of the European Union Microsoft competition case which involved legal proceedings by the EU against Microsoft that found that, via market dominance of the operating system market with Microsoft Windows, Internet Explorer's...
.
See also
- United States Microsoft antitrust caseUnited States v. MicrosoftUnited States v. Microsoft was a set of civil actions filed against Microsoft Corporation pursuant to the Sherman Antitrust Act of 1890 Section 1 and 2 on May 8, 1998 by the United States Department of Justice and 20 U.S. states. Joel I. Klein was the lead prosecutor...
- Criticism of MicrosoftCriticism of MicrosoftCriticism of Microsoft has followed various aspects of its products and business practices. Issues with ease of use, stability, and security of the company's software are common targets for critics. In the 2000s, a number of malware attacks have targeted security flaws in Microsoft Windows and...
- Microsoft litigationMicrosoft litigationMicrosoft has been involved in numerous high-profile litigations over the history of the company, including cases against the United States, the European Union, and competitors.-Governmental:In its 2008 annual report, Microsoft stated:-Anti-trust:...
External links
- European Committee for Interoperable Systems (ECIS) The Court of First Instance's judgment in case T-201/04 Microsoft v Commission & background documents. Accessed 2007-09-21
- Microsoft's implementation of the EU ruling
- FSFE's case project page, FSFE have been third-party in the case since 2001
- Groklaw interview Georg Greve (FSFE), Jeremy AllisonJeremy AllisonJeremy Allison is a computer programmer known for his contributions to the free software community, notably to Samba, a re-implementation of SMB/CIFS networking protocol, released under the GNU General Public License....
and Volker Lendecke (Samba developers), and Carlo PianaCarlo PianaCarlo Piana is a lawyer by training and a Free Software advocate. A qualified attorney in Italy, Piana has been practicing IT law since 1995,focusing his practice on software, technology, standardization, data protection and digital liberties in general, and serves as external General Counsel to...
(their lawyer), these people participated in the case