21 June 2002 The European Commission is moving closer to a decision on whether to punish Microsoft for breaching competition law in Europe.
According to “sources” quoted in French national daily Le Monde, a decision by the Commission is likely to arrive before 1 September – and may result in a multi-billion euro fine being levied on the software giant, regardless of the outcome of the antitrust case in the US.
The inquiry has focused on Microsoft’s Windows XP bundling policy, in which applications such as media players have been tightly integrated with the core operating system. Competitors have complained that it is not only anti-competitive, but deliberately designed to make it more difficult for people to use competing products instead.
The date of 1 September is significant because that is when three directors at the Commission’s competition directorate are scheduled to be replaced. Le Monde quotes Amelia Torres, the Commission’s spokeswoman on competition policy issues: “The European Commission is still at the stage where it is examining the documents [submitted]. But we should reach a conclusion before the end of the year.”
The Commission started the inquiry in October 2001. Microsoft appeared to offer limited concessions in March 2002. Those concessions were centred on the Kerberos authentication protocol and the Common Internet File System (CIFS) standard, but it is unlikely they went far enough.
All this is unlikely to placate the European Union’s (EU) regulators. “The Commission will read carefully the American decision, but our investigation is totally independent from that pursued in the United States,” said Torres.
It is not the only EU investigation into Microsoft’s business practices. Brussels has also been investigating Microsoft’s Passport online authentication system, which has been criticised on data privacy grounds. Microsoft has consistently denied any wrongdoing.
If the Commission finds Microsoft guilty of abusing its dominant position, it can impose fines amounting to a maximum of 10% of the company’s annual sales – potentially a fine of $2.5 billion (€2.6bn) in Microsoft’s case.