Brussels, 27th February 2008
“Microsoft was the first company in fifty years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision", said European Competition Commissioner Neelie Kroes. "I hope that today's Decision closes a dark chapter in Microsoft's record of non-compliance with the Commission’s March 2004 Decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft's future conduct".
The Commission’s Decision of March 2004 requires Microsoft to disclose complete and accurate interoperability information to developers of work group server operating systems on reasonable terms.
Initially, Microsoft had demanded a royalty rate of 3.87% of a licensee's product revenues for a patent licence (the "patent licence") and of 2.98% for a licence giving access to the secret interoperability information (the "information licence"). In a statement of objections of 1 March 2007, the Commission set out its concerns regarding Microsoft's unreasonable pricing (IP/07/269). On 21 May 2007, Microsoft reduced its royalty rates to 0.7% for a patent licence and 0.5% for an information licence, as regards sales within the EEA, while leaving the worldwide rates unchanged.
Only as from 22 October 2007 did Microsoft provide a licence giving access to the interoperability information for a flat fee of €10 000 and an optional worldwide patent licence for a reduced royalty of 0.4 % of licensees’ product revenues (see IP/07/1567).
Today’s Decision concludes that the royalties that Microsoft charged for the information licence – i.e. access to the interoperability information - prior to 22 October 2007 were unreasonable. Microsoft therefore failed to comply with the March 2004 Decision for three years, thereby continuing the behaviour confirmed as illegal by the Court of First Instance. Today's Decision concerns a period of non-compliance not covered by the penalty payment decision of 12 July 2006 (see IP/06/979) starting on 21 June 2006 and ending on 21 October 2007. The Decision does not cover the royalties for a distinct patent licence.
The Commission has based its conclusions as to the unreasonableness of
Microsoft's royalties prior to 22 October 2007 on the lack of innovation in a
very large proportion of the unpatented interoperability information and a
comparison with the pricing of similar interoperability technology.
For further information and background on this case see MEMO/08/125 and the Europa website: