Friday, September 28, 2012

Microsoft Corporation (NASDAQ:MSFT) May Face a stiff penalty from EU

A technical error could Microsoft Corporation(NASDAQ:MSFT) dear and could end up in its becoming liable to pay up to $7.4 billion in fines levied by the European Union for breach of agreement.

European Union anti-trust laws are pretty stringent and software giant Microsoft has often found itself on the wrong side of the regulators there, who have already fined it in the past for an amount of $1.28 billion.

But this will seem like small change if the current violation is brought on to the company.

In 2009, Microsoft, acting under the orders of the EU offered its Windows users in Europe a wide choice in browsers after allegations surfaced that the Windows operating environment did not allow other browsers (other than Internet Explorer) to be downloaded.
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This was known as browser ballot and gave users the freedom to choose their own browsers, according to their needs.

However earlier this personal computers shipped to Europe were found not to have this functionality. It affected those PCs which were operating Windows 7 with Service Pack 1.

When the error was brought to the notice of Microsoft it said that it was a technical error and admitted that around 28 million PCs did not have the browser ballot. Those operating the original Windows 7 and other versions of the operating system did not have this problem.

However the EU regulators have taken a different view of this matter and are looking at it as a serious violation and a breach of agreement that cold have potential serious consequences for the world’s largest software company.

"The next step is to open a formal proceeding into the company's breach of an agreement. We are working on this," EU Competition Commissioner Joaquin Almunia reportedly told reporters at a conference in Warsaw. "It should not be a long investigation because the company itself explicitly recognized its breach of the agreement."

That sounds rather ominous.

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