Can't find a topic about this and I am amazed, but I'm a dumb bonde and it may be right in front of my face.
Earlier today, the European Commission (EC) announced that it had issued a formal “Statement of Objections” against Microsoft, arguing that the company is overcharging for technology being made available to competitors under the EC’s March 2004 order. Microsoft has four weeks to respond to the Statement and can request an oral hearing.
Microsoft Senior Vice President and General Counsel Brad Smith said, “Microsoft has spent three years and many millions of dollars to comply with the European Commission’s decision. We submitted a pricing proposal to the Commission last August and have been asking for feedback on it since that time… [W]e believe we have been fair in setting proposed protocol prices, and an analysis by PricewaterhouseCoopers found that our proposed prices were at least 30 percent below the market rate for comparable technology.”
Read Brad Smith’s Full Statement
European Competition Commissioner Neelie Kroes said, “The Commission’s current view is that there is no significant innovation in these protocols” and therefore Microsoft can only charge a nominal fee under European competition law.
Microsoft does not agree on this point. The protocols include technologies that have been awarded at least 36 patents in the U.S. and Europe, with another 37 pending. Microsoft is following standard industry practices in offering licenses on reasonable and non–discriminatory terms.
In March 2004, the EC imposed a record 497 million euro fine (approximately $613 million at then–current exchange rates), mandated the licensing of certain technology, and ordered the company to sell a version of Windows in Europe with Windows Media Player software code stripped out. These sanctions far exceeded the terms of the court–approved antitrust settlement that Microsoft reached with the U.S. government and state plaintiffs in November 2001.
Microsoft appealed EC ruling to the European Court of First Instance, and presented its case in April 2006. While the case is on appeal, however, Microsoft is required to comply with the EC sanctions. The company paid the initial fine, shipped a degraded version of Windows without media–playing capabilities, and established a technology licensing program.
In July 2006, the EC fined Microsoft an additional 280.5 million euros ($357 million at then–current exchange rates). This additional fine arose from the EC’s determination that Microsoft had not adequately documented Windows Server technology in the mandated licensing program. Today’s European action also revolves around this licensing program, and Microsoft now faces potential additional fines of several million euros.
Microsoft leadership will carefully review the details of today’s Statement of Objections and respond formally to the European Commission in the coming weeks.
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Look to the FIN for additional updates on the dispute with the European Commission. For further technology news and information, visit the FIN Web site.
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