Microsoft stuck with $1 billion fine in European antitrust case

@CNNMoneyTech June 27, 2012: 2:02 PM ET

NEW YORK (CNNMoney) -- Microsoft is stuck paying a $1 billion fine for an antitrust ruling handed down in 2008, after a European court on Wednesday rejected the company's long-running appeal.

Microsoft (MSFT, Fortune 500) was charged in 2004 with refusing to make "certain interoperability information" available to competitors between 1998 and 2004. That kept rivals' products from working with Windows' server software.

A series of rulings from the European Commission over the next few years led to fines totaling billions. The lion's share of the financial penalties came because of Microsoft's "noncompliance" with those rulings.

The European antitrust case has cost Microsoft a whopping $2.04 billion in total, including Wednesday's ruling from the General Court of the European Union, which upheld almost all of the Commission's previously levied fines.

Microsoft has nearly $60 billion in cash on hand and has already paid the fine, but it appealed in hopes of getting its money refunded.

"We are disappointed with the Court's ruling," Microsoft said Wednesday in a written statement.

The company emphasized that it is back on good terms with European antitrust regulators, saying: "In 2009 Microsoft entered into a broad understanding with the Commission that resolved its competition law concerns."

The battle started in 2004, when the European Commission ruled that Microsoft had to pay a 497 million euro penalty (about $620 million) for keeping key information from its competitors. Microsoft was ordered to make the information available through "reasonable and "non-discriminatory terms."

But in 2006, the Commission said that Microsoft didn't comply quickly enough with the order and that it charged exorbitant amounts for access to the information. So Microsoft was slapped with another fine: more than 280 million euro ($350 million).

Microsoft continued to charge "unreasonable rates," the Commission ruled, and so in 2008 it ordered the company to pay another 899 million euro ($1.12 billion).

Microsoft appealed that decision to the General Court. The court's ruling on Wednesday knocked down Microsoft's objections.

However, the court did reduce the 2008 fine to 860 million euros ($1.07 billion), down from 899 million euro. The court cited a 2005 letter from the Commission, which told Microsoft that it could "restrict distribution of products developed by its 'open-source' competitors," as its reason for lowering the fine.

That letter helped Microsoft score a nearly $50 million discount on the fine. Considering that this case has now cost Microsoft more than $2 billion -- more than it spent this week buying Yammer -- saving a few million is pretty cold comfort.  To top of page

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