It’s said that eggs and promises are easily broken and it’s always easy to give a promise, rather than keep it. There is nothing worse than a broken promise, especially when this promise costs $732 million and a lot of troubles. The European Union fined Microsoft Corp for the disrespect of the promise given earlier. Binding commitment and a promise, given by Microsoft in 2009 was not kept and had cost Microsoft Corp $732 million in the way of a fine given by the EU’s antitrust body.
According to the commitment, given by Microsoft in 2009, it offered the users a chance to choose the Web browser they preferred. Microsoft agreed to change Windows for five years and gave the users of newly bought computers in Europe a ballot screen due to which everyone could easily download other browsers from the Internet and turn off Microsoft’s browser, Internet Explorer. At the end of 2011 it has been reported by Microsoft representatives to the EU’s commission that the obligation had been kept, but after the investigation it turned out that it was violated.
According to the Microsoft spokesman the following situation occurred due to some technical errors and a promise to fix and elaborate the problem in future was given by the Microsoft Corp representatives. There were previous disputes between the EU’s antitrust institution and Microsoft Corp before. In 2004 Microsoft was accused of abusing its market position and was fined as it linked Windows Media Player to the Windows software package again leaving no choice to the users.
According to the investigation, Microsoft Corp failed to follow the obligation and as a result, 15 million users didn’t get a chance to select the browser they wanted. For the first time in history the EU and European Union’s antitrust authorities fined a corporation for the neglect to perform the obligations. According to the deal, EU’s antitrust committee can put a fine of up 10% of a company’s global annual sales, but the real fine represented 1% of Microsoft’s annual sales as the corporation cooperated easily with the committee and took no stand. Of course, for the company like Microsoft with $68 billion reserves it’s not a problem to cover such fine. It is estimated that when we compile all the issued fines against Microsoft Corp over the past decades it will be more than 2.2 billion euros.
According to the EU’s representative Joaquin Almunia, this situation will encourage a lot of companies and enterprises to give a great deal of thought before making any promises. What is more, it will serve as a warning to other corporations. Joaquin Almunia called the deal made in 2009, the actions of EU’s representatives and the people who believed this promise to be more than naive. There are other companies apart from Microsoft that are under investigation. Among them is Google for the way it ranks search engine results and another major technology company Samsung Electronics.
To sum up, a deal is a deal and any non-compliance, especially when it comes to such a world-known corporation as Microsoft will cost a fortune with inevitable fine.
- European commission. Press release. Antitrust: Commission fines Microsoft for non-compliance with browser choice commitments, 6 March 2013, Brussels. Web. ‹http://europa.eu/rapid/press-release_IP-13-196_en.htm›.
- Dawn Kawamoto. CNET News.com. EU slaps Microsoft with $1.35 billion fine. 6 March, 2013. Brussels. ‹http://www.cnet.com/news/eu-slaps-microsoft-with-1-35-billion-fine/›.
- Foo Yun Chee. EU fines Microsoft $731 million for broken promise, warns others. 6 March, 2013. Brussels. Web. ‹http://www.reuters.com/article/us-eu-microsoft-idUSBRE92500520130307›.
- Vanessa Mock. EU Fines Microsoft $732 Million. 6 March, 2013. Brussels. Web.‹http://www.wsj.com/articles/SB10001424127887323628804578343843582306944›.
- Joh Letzing. European regulator fines Microsoft $1.35 billion. 27, 2008, San Francisco. Web. ‹http://www.marketwatch.com/story/european-regulator-fines-microsoft-135-billion›.