Microsoft Pays Off $733 Million European Commission Fine

Microsoft released its third quarter (Q3) earnings earlier today for fiscal year 2014 (FY14). This is the first quarter under new CEO Satya Nadella. The earnings report contained a number of interesting pieces of information including the fact that Microsoft has paid its $733 million fine from the European Commission.

For some brief background on the issue (via etwashoo):

The Commission’s preliminary view was that competition was distorted by Microsoft tying Internet Explorer to Windows. This was because it offered Microsoft an artificial distribution advantage not related to the merits of its product on more than 90 per cent of personal computers. Furthermore, the Commission’s preliminary view was that this tying hindered innovation in the market and created artificial incentives for software developers and content providers to design their products or web sites primarily for Internet Explorer.

The approved commitments address these concerns. PC users, by means of the Choice Screen, will have an effective and unbiased choice between Internet Explorer and competing web browsers. This should ensure competition on the merits and allow consumers to benefit from technical developments and innovation both on the web browser market and on related markets, such as web-based applications.

The Commission’s decision is based on Article 9 of Regulation 1/2003 on the implementation of EU antitrust rules. It takes into account the results of the market test launched in October 2009 (see MEMO/09/439). This decision, which does not conclude whether there is an infringement, legally binds Microsoft to the commitments it has offered and ends the Commission’s investigation. If Microsoft were to break its commitments, the Commission could impose a fine of up to 10% of Microsoft’s total annual turnover without having to prove any violation of EU antitrust rules.

The fine contributed to a decline in Microsoft’s profits.

Update:

There was an error in reporting this issue. Microsoft actually paid European Commission Fine last year. Not this year.

About the author  ⁄ Suril Amin

Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin