Microsoft: The EU's ATM Machine

The European Union just bought every one of their citizens a cup of coffee. Or at least, they’re giving them the equivalent. Their most recent fine against Micrsoft – a whopping $1.35 billion, will go directly into the EU’s budget. It works out to about $2.75 for every EU citizen.

Some notable publications are blinking, at, among other things, the size of the fine (a record), the possible lack of legal justification and the potential costs of doing business in Europe. The NYTimes said “The commission’s willingness to enforce vigorously its interpretation of what constitutes unfair competition potentially raises the costs of running a successful business in Europe for many American companies. It might pose problems for companies like Apple, Intel and Qualcomm, whose market dominance in online music downloads, computer chips and mobile phone technology is also being scrutinized by the European Commission.” The UK’s Guardian went further, saying “But some legal experts questioned the EU’s move. Denis Waelbroeck, competition partner at the lawyers Ashurst in Brussels, said: “While such a fine will no doubt do wonders for the commission’s image as a tough regulator, some might consider it unfair, not least since the commission refused to tell Microsoft what would be a ‘reasonable’ amount to charge for patent licences despite being asked several times.””

This isn’t a crushing blow to Microsoft by any means. It’s equal to about two weeks of operating profit. And they have a long history of paying fines for antitrust abuses – $750 million to AOL/Time-Warner in 2003, $1.1 billion to California in 2003, $536 million to Novell in 2004, $1.6 billion to Sun in 2004, $775 million to IBM in 2005, $776 million to Real Networks in 2005. Etc.

But EU fines against Microsoft over the years now total €1.68 billion. And they are far from done – last month the EU opened two new cases against Microsoft, on behalf of a group of European software companies. This is despite the fact that Microsoft is routinely raked over the coals by U.S. regulators for the same issues the Europeans bring up.

The last time the EU visited the Microsoft ATM machine, a few congresspeople sent them a letter telling them to back off, that it was their job to police U.S. companies against antitrust abuses. That letter pretty much went nowhere.

EU’s chief Microsoft-taxer, errr, antitrust chief, Neelie Kroes, seems determined to make a name for herself by filling the EUs coffers. But perhaps it’s time for Europe to stop looking for the Microsoft handouts, and start promoting actual capitalism within their borders. Google, Apple and Mozilla, among others (including Germany’s SAP), seem perfectly able to compete against Microsoft without crying for help every time users decline to use their products.

Those who can, do. Those who can’t apparently live in Brussels and engage in a legalized shakedown of Microsoft every couple of years.

Watch out, Google. You’re next.