EU reportedly looking at US$125m fine in Microsoft case

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COMMENTARY: According to reports, Microsoft is facing a record fine for its antitrust transgressions.

But if you're hoping to see the recalcitrant monopolist face serious punishment, consider this: The roughly US$125 million fine the European Union (EU) is reportedly seeking is pocket change for a company that makes more than US$1 billion per month in profits and has more than US$50 billion in cash or liquid assets on hand.

To put this potential fine in perspective, if Microsoft were an individual who made an average annual salary of US$35,000, the fine would amount to less than US$365 -- about the cost of a midlevel Apple iPod or one car payment.

The German magazine Focus, citing informed sources within the EU, revealed the fine amount this week. The report states that European Competition Commissioner Mario Monti has concluded that Microsoft abused its monopoly power in the PC market to push its digital-media application, Windows Media Player (WMP), on consumers and to gain an edge in the hotly contested server market.

An EU spokesperson, however, denied the report. "As far as any eventual or possible fine, any amounts that could be printed at this stage are pure and utter speculation," the spokesperson said. "Nobody yet in this house has discussed any amount for the fine."

On the Microsoft side, a company representative noted that the EU could potentially fine Microsoft as much as US$3 billion but that such a huge fine would be unlikely.

"The speculation about [fines] has heightened because the Commission confirmed there is a draft decision floating around," the Microsoft spokesperson said.

"We're looking at April or May, or maybe earlier, before they'll issue the decision, but on a separate track, we're continuing to actively engage the Commission in the hopes of resolving this." Officially, the EU corroborates this statement; Monti noted this week that he's still considering a settlement with Microsoft, although time is running out.

Meanwhile, critics are complaining that the EU is fighting yesterday's battle, a charge that observers often made during the slow-moving US antitrust case against Microsoft. Today, Microsoft has a major new digital-media challenger in Apple Computer's iTunes and its associated online music store, which dominate the downloadable-music business.

At the same time, Microsoft is allegedly pursuing the internet search company Google, using the same strategies that were successful against internet pioneer Netscape. (Complaints from Netscape were the impetus for Microsoft's US antitrust woes.)

In the United States, the state of Massachusetts is looking into Microsoft's efforts to unseat Google. During a regular review of Microsoft's US-based antitrust settlement compliance last month, Massachusetts's deputy attorney general told a federal judge that the state is "reviewing allegations that Microsoft is currently engaged in a campaign against various internet search engines similar to the campaign it previously waged against Netscape's Navigator browser."

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