Was Microsoft's EU fine too much? One economics professor says, "Yes"

On Wednesday, the European Union's antitrust regulators in the European Commission fined Microsoft 561 million euros, or $732 million, due to Microsoft's violations of a 2009 anti-trust agreement with the EU. Microsoft admitted that a number of Windows 7-based PCs did not display the required web browser download ballot in Europe from 2011 to 2012, as required by the agreement with the EU. Microsoft said it was a software mistake and fixed it once it was discovered.

In their decision on Wednesday, the EU said, "A failure to comply is a very serious infringement that must be sanctioned accordingly." But was the amount of the fine too much for what was apparently an unintentional error on Microsoft's part? Nicholas Economides, a professor at New York University's Stern School of Business. seems to think so.

Investors.com quotes Economides as saying, "This fine is extraordinary. It's huge, for something that for all intents and purposes looks like a mistake." He added that while Microsoft's technical issues could have been avoided, he said, " ... to charge them more than $700 million on a technical glitch sounds excessive to me."

Microsoft has also been cooperative with the EU on this manner and Economides believes that the EU is distracted with punishing Microsoft when they should go after Google. The EU has its own anti-trust investigation going into Google's search policies and Economides says Google has been "defiant" in terms of their cooperation with the EU's questions.

Source: Investors.com | Image via Microsoft

Report a problem with article
Previous Story

Microsoft releases Bing Desktop 1.2; adds Facebook content

Next Story

Microsoft to open new cybercrime center in Redmond

68 Comments

View more comments

rfirth said,
Fine, but they should prove malicious intent to justify a fine that large.

Why? Microsoft was required to ensure its own compliance, which is failed to do. It then gave false testimony to the EC when it claimed it was fully compliant. Just because it wasn't deliberate does not mean it wasn't worthy of punishment.

theyarecomingforyou said,

Why? Microsoft was required to ensure its own compliance, which is failed to do. It then gave false testimony to the EC when it claimed it was fully compliant. Just because it wasn't deliberate does not mean it wasn't worthy of punishment.

EXACTLY. Couldn't say it better myself. MSFT had it coming for not taking it seriously enough the first time.

TomJones said,

The punishment should fit the crime.


See, this reasoning doesn't make any sense. It has already been decided what the punishment should be if this would happen in the future. You may complain about the original court case that's several years old by now, but there is no confusion about what the penalties should be now.

Microsoft didn't whine about it because they knew what they had coming. It's journalled on paper and clubbed in court. What Mr Ballmer may be angry about is the team that made this oversight and I wouldn't be surprised if some people had to leave the company, or had a very uncomfortable... talk with him.

It's also not up to the EU to prove that this was an oversight and not malicious. It doesn't work like that when you have a previous court order shoved up your ass. By then, you are supposed to be particularly cautious to follow what's in the freaking document.

All this is really laughable. It's such a minor software effort with a huge penalty backing it if it's not implemented that I just can't understand how Microsoft missed it, if they indeed just forgot about it. Microsoft and their army of lawyers.

Google should be the one getting all these fines today not Microsoft, Google are being let free to do whatever they want in Europe and North America, time for them to start being held accountable for the crap they do.

what I'm most concerned about is the probability that the E.U. knew almost immediately that the violation took place but they let it go for a year as an excuse to jack up the fine.

seta-san said,
what I'm most concerned about is the probability that the E.U. knew almost immediately that the violation took place but they let it go for a year as an excuse to jack up the fine.

It could also have been intentional to give MS time to notice and fix their mistake. When the "mistake" turned into an actual omission, the fine came along.

It's not like the EU is supposed to be Microsoft's nanny. Microsoft has a minor army of legal advisors and this is their job.

Their operating system .... Their defaults! To me it's very acceptable if an OS comes with its default and as a user I should be able to install/change to the browser and the search engine of my choice & if not its MY fault/choice not that of the parent company.

Who even care about that ballot screen?.....
Most of the people know the Google Chrome exist without Microsoft telling them. If there are people who don't know, most likely they does not know how to use computer well and most likely they would not use the ballot screen and just continue use IE...

If the EU is so desperate for money and if they really wanna help people out why can't they sue the **** out of monsanto then...? they cause way more harm then not having the stupid browser ballot crap...

and inb4 the members that would make up reasons for apologizing for the EU killing thier dogs.... YOU NEED NOT REPLY.

A simple mistake? Highly unlikely. However, it makes no different whether it was or not. Incompetence and ignorance are no defence in the eyes of the law. Microsoft know damn well that the EU would fine them again if they broke the agreement over this ballot thing, but they tried it on anyway.

"Incompetence and ignorance are no defence in the eyes of the law"

Yes they are, they change the crime in many instances. Compare premeditated murder, murder, manslaughter, negligent manslaughter, etc.

Normally I'd say they "forgot" the browser ballot on purpose but this time I think it was a mistake. Why? Because absolutely no one would have missed it and complained saying they needed it.
I'm fed up of having my IE icons stolen off me by it in return for being offered to install KMeleon. It's not about Choice at all. Anyone can choose to go and download Firefox or Chrome if they want to. A nicer choice would be not having Chrome bundled as FOISTWARE with nearly everything nowadays.

Its funny that banks which messed with libor at a catastrophic level to the economy got fined £400m each. Yet this browser anti-trust settlement keeps going on for a decade at this price. If they also ban porn on Wednesday, I will become an asylum seeker to the US or Canada. Microsoft should say: I am not selling or supporting windows to EMEA and see the businesses go after the EU and their stupid Nazi way of thinking. *Spit

Riva said,
Microsoft should say: I am not selling or supporting windows to EMEA and see the businesses go after the EU and their stupid Nazi way of thinking. *Spit

If Microsoft doesn't want the revenue it currently gets - the EU alone already has more potential customers than the US - it maybe should do that...

On the Nazi thing: it's nice that you have no idea what you're talking about...

MFH said,

[...] nice that you have no idea what you're talking about...

Or not even an understanding of the acronym EMEA. LOL.

Such an insightful analysis by the revered professor !

Anyhow, the fine is a little over 1% of yearly revenue. 'Too much' is relative.

Mistake or not, a patch tuesday/ out-of-cycle update would have solved the issue.

Commenting is disabled on this article.