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EU fine won't end probes of Microsoft

The software giant, which is told to pay a record $1.36 billion in an antitrust case, still faces two inquiries.

TECHNOLOGY

February 28, 2008|Jim Puzzanghera, Times Staff Writer

WASHINGTON — The record $1.36-billion fine Microsoft Corp. must pay the European Union won't buy the software company much peace.

Wednesday's penalty, which amounts to almost one-third of Microsoft's last quarterly profit, officially closes a nine-year antitrust battle with European regulators that has cost the company a total of $2.5 billion in fines.


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But those regulators are still pursuing two new investigations into the software giant's business practices. They also loom as an obstacle to Microsoft's proposed takeover of Yahoo Inc., which would need approval in Brussels and Washington.

"Antitrust is a chronic condition of doing business for Microsoft," said Matt Rosoff, an analyst at research firm Directions on Microsoft. "I don't think that's going away."

In 2004, the European Union found that Microsoft had abused its dominance in personal computer operating systems to limit competition. It ordered the company to make technical information available to firms so their software would work with Windows and other Microsoft products.

European regulators levied Wednesday's fine after determining that, for three years after the ruling, Microsoft had charged "unreasonable prices" for that information.

Neelie Kroes, EU commissioner for competition policy, sharply criticized Microsoft on Wednesday for not living up to its promises to regulators.

"Talk is cheap. Flouting the rules is expensive," she said at a news conference in Brussels. "We don't want talk and promises. We want compliance."

Kroes' tough stance shows that the European Commission, the EU's antitrust regulator, remains unhappy with Microsoft and will aggressively pursue the two new investigations it launched in January, said Harry First, a New York University law professor who is writing a book about the company's antitrust litigation.

"It's a lot of zeros on that fine," he said.

Microsoft said it was reviewing the commission's action.

"The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about past issues that have been resolved," the Redmond, Wash.-based company said in a statement.

Microsoft has paid about $10 billion in fines and settlements with competitors over antitrust issues in Europe and the United States, Rosoff said. It's the world's largest software maker, generating $51.1 billion in revenue and $14.1 billion in net income during its fiscal year ended June 30.

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