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European Union Microsoft antitrust case

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The European Union Microsoft antitrust case is a case brought by the European Union (EU) against Microsoft for alleged antitrust abuse. It started as a complaint from Novell over Microsoft's licensing practices in 1993, and eventually resulting in the EU ordering Microsoft to divulge certain information about its server products and a separate version of Microsoft Windows without Windows Media Player.

Initial complaints

In 1993, Novell complained that Microsoft was blocking its competitors out of the market through anticompetitive practices. The complaint centered on the license practices at the time which required royalties from each unit sold by a supplier of Microsoft's operating system regardless of whether or not the unit actually contained the Windows operating system. Microsoft reached a settlement in 1994, ending some of its license practices.

Sun Microsystems joined the fray in 1998 when it complained about the lack of disclosure of the some of the interfaces to Windows NT. The case widened even more when the EU started to look into how streaming media technologies were integrated with Windows.

Judgment

Citing ongoing abuse by Microsoft, the EU reached a preliminary decision in the case in 2003 and ordered the company to both offer a version of Windows without Windows Media Player and offer the information necessary for competitors with low-end servers to have full compatibility with Windows desktops and servers. In March 2004, the EU ordered Microsoft to pay 497 million (US$613 million), the largest fine ever handed out by the EU at the time, in addition to the previous penalties, which included 120 days to divulge the server information and 90 days to produce a version of Windows without Windows Media Player. The next month Microsoft released a paper containing scathing commentary on the ruling including: "The commission is seeking to make new law that will have an adverse impact on intellectual property rights and the ability of dominant firms to innovate." Microsoft paid the fine in full in July 2004.

Follow-up

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The company made a compliant version of its flagship operating system without Windows Media Player available under the negotiated name "Windows XP N." In an attempt to comply with the server information requirement, Microsoft released the source code to Windows Server 2003 service pack 1 to members of its Work Group Server Protocol Program (WSPP) on the day of the original deadline. Microsoft also appealed the case, and the EU had a week-long hearing over the appeal which ended in April 2006. As of July 2006, outcome of the appeal has not arrived yet.

In December 2005 the EU announced that it believed Microsoft did not comply fully with the ruling, stating that the company did not disclose enough information about its server programs. The EU said that it would begin to fine Microsoft €2 million a day until it did so. Microsoft stated in June 2006 that it had begun to provide the EU with the requested information, but according to the BBC the EU stated that it was too late.

On July 12, 2006, the EU fined Microsoft for an additional €280.5 million, €1.5 million per day from December 16, 2005 to June 20, 2006. The EU will increase the fine to €3 million per day on July 31, 2006 if Microsoft does not comply by then.

References

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