Microsoft Corporation (NASDAQ:MSFT) – a top stock play among hedge funds we track – apparently reneged on a promise to fix an antitrust issue, and European Union regulators don’t take too well to promises being broken. So the EU put a value on a broken promise, and handed down a stiff sanction to Redmond and a warning shot to other companies that the EU is investigating or may investigate in the future.
With this latest sanction, totaling $731 million, Microsoft Corporation is now the most-sanctioned single company by the EU for antitrust violations over the last decade (about $2.8 billion). The latest sanction stems from a past order from EU regulators to have Microsoft provide users a choice of web browser to use, instead of defaulting to Redmond’s own Internet Explorer browser. Microsoft made a “legally binding” promise to correct the issue and provide alternative browsers on its Windows platform, but a later investigation revealed that Microsoft did not honor its obligation with software sent out for more than a year ending in July 2012. That affected an estimated 15 million users.
In response, Microsoft Corporation wrote in a statement, “We have apologized for it. We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future.”
Microsoft first encountered the EU’s sanction wrath in 2004 for having a default Windows Media Player tied directly with its Windows software and not giving users an option of other media-streaming software.
What do you think about this sanction? How do you think this will affect Microsoft Corporation? Give us your thoughts in the comments section below.
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