Microsoft sued over browser miscue that led to $731 million EU fine

[jackergin]

(Reuters) - Microsoft Corp's board faces a lawsuit over the way it handled an error with its Internet Explorer browser that ended up costing the company a record-breaking $731 million fine by European antitrust regulators.

 

The lawsuit, brought by shareholder Kim Barovic in federal court in Seattle on Friday, charges that directors and executives, including founder Bill Gates and former Chief Executive Officer Steve Ballmer, failed to manage the company properly and that the board's investigation was insufficient into how the miscue occurred.

 

The legal action is the first to emerge from a humiliating episode for Microsoft, which the software company has never fully explained and has accounted for only as a "technical error."

 

In March last year, the European Union levied its largest ever antitrust fine against Microsoft for breaking a legally binding commitment made in 2009 to ensure that consumers in Europe had a choice of how they access the internet, rather than defaulting to Microsoft's Internet Explorer browser.

 

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[DeadEndAccount]

Could someone explain to me the rationale of fining a company for making an honest mistake? Is this just the bankrupt EU once again trying to find ways of clawing money out of businesses with a healthy bank balance?

[FloatingFatMan]

Could someone explain to me the rationale of fining a company for making an honest mistake? Is this just the bankrupt EU once again trying to find ways of clawing money out of businesses with a healthy bank balance?

 

Because it wasn't an honest mistake, they just claimed it was.

 

No company "accidentally" fails to comply with a court order, it was clearly a deliberate act on the part of persons in charge.

[spenser.d]

Sounds like a disgruntled board member who isn't getting what she wants out of her position.

[leesmithg]

Could someone explain to me the rationale of fining a company for making an honest mistake? Is this just the bankrupt EU once again trying to find ways of clawing money out of businesses with a healthy bank balance?

'an honest mistake'

 

The European Union chase every cash Cow they can to milk money from them.

 

If it wasn't for Windows & Apple, millions of devices would not had been made and millions of jobs would not had been created.

 

European Union is a joke, full of theft and un-elected judges.

[xrobwx71]

Because it wasn't an honest mistake, they just claimed it was.

 

No company "accidentally" fails to comply with a court order, it was clearly a deliberate act on the part of persons in charge.

Why would they proceed on purpose? Why would they "make a flaw or not fix a flaw" on purpose if they knew it was going to cost them money? Did the fine under weigh the profit? 

[jackergin]

Wait but it's not the EU whose suing them but rather a shareholder so why are you talking about the EU?

[Guest]

Ah, the "beauty" of public companies, where the "owners" don't give a shit about the company or the employees, and just want to see those $ pile up in their accounts by any means necessary.

 

If you're making millions / billions, why go public in the first place?

[FloatingFatMan]

Why would they proceed on purpose? Why would they "make a flaw or not fix a flaw" on purpose if they knew it was going to cost them money? Did the fine under weigh the profit? 

 

Because they were trying to get away with it?  I dunno, you'd have to ask them, but don't expect an honest answer.

 

Either way, the whole court case and judgement were bogus, brought on by a bunch of whiner babies (Opera) who's crap software couldn't compete with IE and has become largely irrelevant.

Wait but it's not the EU whose suing them but rather a shareholder so why are you talking about the EU?

 

Because the shareholder is suing them over why the EU courts fined them for in the first place.

[jackergin]

@FloatingFatMan Oh ok thanks

[Studio384]

Could someone explain to me the rationale of fining a company for making an honest mistake? Is this just the bankrupt EU once again trying to find ways of clawing money out of businesses with a healthy bank balance?

It's not the EU who's doing this.

 

Because it wasn't an honest mistake, they just claimed it was.

 

No company "accidentally" fails to comply with a court order, it was clearly a deliberate act on the part of persons in charge.

They didn't fail to comply, Windows 7 SP1 contained a bug that caused the screen not to show up anymore, any other version of Windows did get this screen through. Why would Microsoft create a bug only on the minority of operating systems (Windows 7 SP1 wasn't pushed automaticaly through Windows Update back then).

[FloatingFatMan]

It's not the EU who's doing this.

 

They didn't fail to comply, Windows 7 SP1 contained a bug that caused the screen not to show up anymore, any other version of Windows did get this screen through. Why would Microsoft create a bug only on the minority of operating systems (Windows 7 SP1 wasn't pushed automaticaly through Windows Update back then).

 

Bug my ass.  There's no way they didn't know this didn't happen. It was blatant an any new install of the SP1 slipstreamed ISO.

[leesmithg]

Wait but it's not the EU whose suing them but rather a shareholder so why are you talking about the EU?

European Anti Trust Regulators, whom are run by the E.U.

[Max Norris]

Brilliant. A shareholder suing the company over a mistake that cost them money... so it'll cost them even more money. 

 

Whole thing needs to be overturned anyway, it's not even relevant anymore, never mind biased as hell.

[Turk.]

rationale of fining a company

Legally, It is not an honest mistake, it is a deliberate, knowingly, intentional "misleading deceptive conduct" in which involves full directors board. In Civil law countries, in contrary to common law countries, social consumer protection is of a higher priority. I know the case that EU warned MS many times for this issue. They ignored cynically, and the fine is nothing for MS at this high grade breach. Correct legal decision and can not be overturned or won by MS in any way.

Steve Ballmer, he was a developers, developers, developers joke, not EU. :)

[Anibal P]

Wow so much unfounded and unnecessary hate for a mistake, if you think otherwise I suggest you go hang out in the conspiracy forum for a while 

 

As for the lawsuit, any sane and sensible judge would throw it out, sadly there aren't that many in our system anymore 

[AnotherITguy]

First off, the browser ballot was just ridiculous, just like WINDOWS Version N was.

 

Second, this shareholder lawsuit  sounds very frivolous.

 

#SMH

[techbeck]

Most likely just an honest mistake but even honest mistakes cost you.  Fine is way steep tho.

[FloatingFatMan]

Most likely just an honest mistake but even honest mistakes cost you.  Fine is way steep tho.

 

The fine was ages ago, as was the so called "mistake". This is about a shareholder suing them over the whole debacle.

[theyarecomingforyou]

Could someone explain to me the rationale of fining a company for making an honest mistake? Is this just the bankrupt EU once again trying to find ways of clawing money out of businesses with a healthy bank balance?

Microsoft was found to have violated competition law in the EU and was required by the EC to implement the browser ballot in order to avoid a fine. However, Microsoft removed the browser ballot in Windows 7 Service Pack 1 and was out of compliance for 14 months - during this time Microsoft's certified that it was in compliance with the legal ruling, which is the reason for the fine. 

 

Microsoft's legal team should have been monitoring the company's compliance with the ruling and picked up on the issue as soon as it occurred, especially given the severity of the matter. The fine was easily avoidable. The EU is very strict when it comes to enforcing competition law. A lot of the time the EC avoids fines?as was the case with Apple and its ebook price fixing?and that would have been the case with Microsoft if it hadn't provided false testimony. As for the insinuation that the EU is bankrupt, it has a larger GDP than the US and has the same credit rating (AA+) - baseless accusation is baseless.

[Torolol]

i for one loves to seeing big american companies being fined left & right on euro-lands

[jakem1]

Whether it was a mistake or not is beside the point.  MS had a legal obligation to ensure that all users were presented with the browser selection screen.  They didn't do that (whether by accident or not) and they were accordingly fined - remember that ignorance is no defence.  That's the way that the law works in any jurisdiction which is why MS didn't object to the fine.  All this ill-informed criticism of the EU is pointless.

[Mr. Gibs]

As for the insinuation that the EU is bankrupt, it has a larger GDP than the US and has the same credit rating (AA+) - baseless accusation is baseless.

While I agree with your point, just because a country has a high GDP and a good credit rating means absolutely jack ###### when it comes to it's debts.

[DeadEndAccount]

'an honest mistake'

 

The European Union chase every cash Cow they can to milk money from them.

 

If it wasn't for Windows & Apple, millions of devices would not had been made and millions of jobs would not had been created.

 

European Union is a joke, full of theft and un-elected judges.

 

When you're bank rolling a agricultural welfare scheme running into the hundreds of billions I guess you need ever euro you can get your hands on.

 

It's not the EU who's doing this.

 

Yes it is the EU because if the EU didn't fine Microsoft then Microsoft wouldn't be getting sued in the first place by a shareholder.

 

 

 

Microsoft was found to have violated competition law in the EU and was required by the EC to implement the browser ballot in order to avoid a fine. However, Microsoft removed the browser ballot in Windows 7 Service Pack 1 and was out of compliance for 14 months - during this time Microsoft's certified that it was in compliance with the legal ruling, which is the reason for the fine. 

 

Microsoft's legal team should have been monitoring the company's compliance with the ruling and picked up on the issue as soon as it occurred, especially given the severity of the matter. The fine was easily avoidable. The EU is very strict when it comes to enforcing competition law. A lot of the time the EC avoids fines?as was the case with Apple and its ebook price fixing?and that would have been the case with Microsoft if it hadn't provided false testimony. As for the insinuation that the EU is bankrupt, it has a larger GDP than the US and has the same credit rating (AA+) - baseless accusation is baseless.

 

Sorry, I hadn't realised how long the gap was between not complying with regulation and the fact that Microsoft were fighting against the ruling over the 14 months. When I am referring to the EU I am talking about the individual states - btw, credit ratings don't mean crap when for over a decade we had these same ratings agencies selling mortgage backed securities as triple A rating ultra secure investments when in reality it is a giant sham. Then there is the US credit rating of AA+ even though for years the country has run massive deficits, shown a complete refusal to cut spending and/or raise taxes yet some how gets a 'free pass' by these so-called 'ratings agencies'. I can't help but come to the conclusion that these ratings agencies are little more than political tools rather than genuine barometers of financial health.

[theyarecomingforyou]

When I am referring to the EU I am talking about the individual states - btw, credit ratings don't mean crap when for over a decade we had these same ratings agencies selling mortgage backed securities as triple A rating ultra secure investments when in reality it is a giant sham. Then there is the US credit rating of AA+ even though for years the country has run massive deficits, shown a complete refusal to cut spending and/or raise taxes yet some how gets a 'free pass' by these so-called 'ratings agencies'. I can't help but come to the conclusion that these ratings agencies are little more than political tools rather than genuine barometers of financial health.

The solvency of individual states is irrelevant when this action was taken by the EC on behalf of the EU as a whole. I mean that would be like saying the US only fines companies because Detroit is bankrupt. Microsoft would have avoided a fine if it had complied with the ruling, which demonstrates that the EU is NOT after the money - it is punishing companies that break the law. As for credit ratings, the entire money market is manipulated for political purposes but that doesn't have any bearing on Microsoft being fined for providing false testimony to the EC.

 

When you're bank rolling a agricultural welfare scheme running into the hundreds of billions I guess you need ever euro you can get your hands on.

Firstly, the EU does not spend "hundreds of billions" on farming subsidies - it spends ?39bn. Secondly, the US does the same thing - it spends $20bn on farming subsidies, plus $15bn to subsidise crop insurance; Japan pays $46bn in farming subsidies. Farming subsidies have NOTHING to do with the EU fining companies for violating competition law.

 

Your dislike of the EU has clouded your objectivity.