The world’s largest software maker Microsoft was fined a whopping $731 million by the European Union for violating the stipulations set forth in a previous antitrust settlement. With an annual revenue of $73 billion, it’s doubtful this latest fine will have any substantial impact on their business operations or practices. But what causes the European Union to hand down such a hefty fine on Bill Gates’ company?
Why Microsoft Was Fined
It’s no secret that Microsoft owns and manages the Internet Explorer (IE) browser. If you’ve purchased a new Windows OS-based PC in the past decade, chances are it came with the IE browser already installed. Some people would argue this practice is perfectly fine and shouldn’t be any cause for concern; however, the European Union would have to say otherwise. They claim that Microsoft entered into an legally-binding agreement back in 2009 that required the software production company to give consumers an easily-accessible choice for their internet browser.
Of course Microsoft continued to package their Windows operating system on computers without giving consumers the option of choosing an internet browser other than their own Internet Explorer. Users could still download and install Mozilla Firefox, Google Chrome or any other browser they please, but they had to go through alternate means to do so. This was in violation of the antitrust signed between Microsoft and the European Agencies; therefore, the fine was handed down.
Joaquin Almunia of the European Union’s competition commission made a statement to the press saying “If companies agree to offer commitments which then become legally binding, they must do what they have committed to do or face the consequences.”
A spokesperson from Microsoft responded by saying the incident was simply due to a technical error, and the company had in fact planned on offering consumers a choice for their internet browser. Microsoft has agreed to cooperate with the investigation and pay all of the fines handed down by the European Union.
Ramifications of The Fine
As previously stated, it’s doubtful this fine will have any severe impact on Microsoft or the company’s day-to-day operations. The $731 million fine is still roughly 10% of their expected quarterly profits, but they will easily make that up with their increasingly popular products and services. In any case, this hefty fine has opened up the eyes of several other major companies, including Google and Apple. In today’s tech-based world, no company is safe from fines and penalties.