Microsoft faces “hundreds of millions of dollars” fine from EU regulators

06 Mar, 2013

Today, Microsoft will be hit with a fine running into the hundreds of millions of dollars by the EU competition regulators.

In 2009, Microsoft made a voluntary agreement with European competition authorities to allow users the choice between different browsers, instead of making Internet Explorer the default browser. Microsoft avoided a long and painful round of litigation by striking a deal, but didn’t keep its part of it. Because of a ‘technical error’ after a 2011 upgrade, about 28 million PC buyers didn’t get a choice of which browser to use.

Apparently, the EU is keen to make Microsoft and example of what happens when you don’t stick to voluntary agreements. Microsoft CEO Steve Ballmer already paid a price for the non compliance: the conflict with the EU is one of the reasons why the Microsoft board only awarded him half his bonus for 2011. The evaluation said one of the reasons for denying Ballmer half of his bonus was

the Windows division failure to provide a browser choice screen on certain Windows PCs in Europe as required by its 2009 commitment with the European Commission (source)

(Interestingly, the board said at the time that it considers Ballmer to be ‘underpaid’. In 2011 Ballmer received a base salary of $ 1,37 million per year, and “only” received a $ 620 000 bonus).

Meanwhile, Microsoft is also in hot waters in Denmark, where the tax authorities are trying to extract an additional $ 1 bn in taxes for Microsofts acquisition of Navision. According to Denmark, Microsoft valued the intellectual property of Navision too low at the time of the purchase.

[FT][photo: Masaru Kamikura, Flickr]

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Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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