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Wednesday, August 1, 2012

Microsoft Will Face Fine from European Commission

The software giant is likely to face antitrust fines as the EC looks to clamp down on monopoly in the tech industry. The company recently admitted the breach of the terms in its antitrust commitment signed 3 years ago which saw all Windows OS get an alternative to IE. The agreement in question was made after investigations by the European Commission in the late 90s.

The developers cited a technical glitch for allowing Windows 7 systems to reach users without the browser choice screen which provided options for the likes of Google’s Chrome and Firefox, aside from the Microsoft’s own IE. Now the European Commission is likely to come down strongly on the company regardless of whether the technical glitch is at fault or not.

Industry experts think that the European Commission will be unsympathetic, wondering why such a huge company with infinite resources failed to monitor the data more carefully. Indeed, the main question is why the company didn’t make sure there weren’t any technical glitches, at the first place.

The EC might be suspicious of whether or not the company is telling the truth, putting officials under pressure to explain exactly what they have done to monitor the situation. Since the European Commission has been hot on the heels of the software giant for over a decade, finding a convincing argument might be an uphill struggle for Microsoft, especially as it made commitments in 2009 that got it out of having to face any financial punishments.

Microsoft will more likely face a fine, as the EC is able to hit companies for up to 10% of their turnover – that’s a significant amount for Microsoft. Despite the fact that the Commission has never implemented such a punishment to the full effect of its powers, it may take into consideration the seriousness of the case. In the past, the software giant has been fined for hundreds of millions of euros, so the fines can really be huge.

In response, Microsoft has offered to extend the conditions of its commitment by 15 months in order to placate the Commission, but the EC is expected to seek to send out a strong message to other companies.

The European Commission has repeatedly said that it’s interested in the tech sector and is going to scrutinize dominance issues. For instance, they are gunning for Google right now, and although these cases are different, they are both about the dominance of the giants in the sector.

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