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EU Competition Commissioner Neelie Kroes
Microsoft finally gives in to the EU's demands

Software juggernaut Microsoft has been involved in an ongoing legal battle with the European Union since a 2004 antitrust ruling was handed down. When DailyTech last looked into the European Union v. Microsoft case, Microsoft was rather reserved after learning that it lost its appeal.

"So, we look forward to continued efforts to implement and comply with today’s decision," said Microsoft senior vice president and general counsel Brad Smith in September. "We welcome the opportunity for continued discussion to adhere to our duties with the European Commission, and we look forward to hopefully continuing to move technology forward to create more jobs on this continent."

It appears now that Microsoft is finally giving up its fight with the European Commission. EU Competition Commissioner Neelie Kroes personally spoke with Microsoft CEO Steve Ballmer on the phone earlier this morning and reached a definitive agreement in regards to compliance with the ruling.

"I welcome that Microsoft has finally undertaken concrete steps to ensure full compliance with the 2004 decision," said Kroes. "It is regrettable that Microsoft has only complied after a considerable delay, two court decisions, and the imposition of daily penalty payments."

"As of today, the major issues concerning compliance have been resolved," Kroes added. "It is a victory day for the consumer... not the Commission."

According to the agreement, Microsoft will have to comply with three separate changes to its business.

  1. Software competitors must be given access to Microsoft interoperability information.
  2. Royalties for said information will be a one-time payment of €10,000 ($14,348 USD).
  3. Worldwide software license/patent royalties will be reduced from 5.95 percent to 0.4 percent.

Should Microsoft fail to comply with any of these changes, "the agreements will be enforceable before the High Court in London, and will provide for effective remedies, including damages, for third-party developers in the event that Microsoft breaches those agreements," according to the European ommission.

For its part, Microsoft simply stated that it will "work closely with the commission and the industry to ensure a flourishing and competitive environment for information technology."

In July 2006, Microsoft was fined €497 million ($710 million USD) for as a result of the 2004 antitrust ruling. The commission then raised the cap on Microsoft’s daily fines from $2.6 million USD to $3.8 million USD in July 2006. Two days later, Microsoft was fined an additional $375.4 million USD in July 2006 for failing to comply with the ruling. Microsoft lost its appeal on September 17, 2007 and the initial €497 million fine was upheld.

In addition to the fine, Microsoft must also pay 80 percent of the European Commission's legal expenses.





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