Microsoft Fined: On Wednesday, European antitrust officials are expected to deliver Microsoft Corporation (NASDAQ:MSFT) some bad news. The company is set to be hit with a large fine for failing to give Windows users the choice of competing web browsers.
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While many companies have been threatened with fines in the past, according to the New York Times “it would be the first time the European Union has punished a company for neglecting to comply with the terms of an antitrust settlement. Microsoft and European antitrust officials reached a settlement over the browser-access issue in 2009. But last October, the Union’s antitrust chief, Joaquín Almunia, charged Microsoft with failing to live up to its terms.”
If you think European authorities are unable to inflict financial pain on companies like Microsoft Corporation (NASDAQ:MSFT), you should consider the fact that it slapped Intel with a $1.4 billion fine in 2009 for “abusing its dominance in the computer chip market.” While Intel is still in the process of appealing the ruling, the lawsuit has taken up a lot of valuable time and resources.
While this decision is sure to have the biggest impact on Microsoft Corporation (NASDAQ:MSFT), don’t overlook what it means to other companies.
For example, the European Union is currently in negotiations with Google Inc (NASDAQ:GOOG) related to its search and advertising practices.
Nicolas Petit, a professor in competition law and economics at the University of Liège in Belgium, weighed in on the subject:
“It’s important for the commission to show it’s serious in this case because this will set a precedent, and because the commission increasingly uses settlements to help reach solutions more quickly especially in the fast-moving technology sector.”
“The commission also has an incentive to slap on a big fine in this case to ensure that companies, which are hard to monitor, get the message that it will be costly down the road if they get caught defying settlement orders.”
We will keep you updated on how this story progresses as the week wears on.
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DISCLOSURE: I have no positions in any stock mentioned.
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