It's the eve of the European Union's decision on Microsoft (NASDAQ:MSFT), where the former is widely expected to find that the software giant has been violating antitrust rules. And now the latest installment in the battle between the two has unfolded. It seems it could be a long, uncomfortable ride for investors.
The EU seems to want to make an example of Microsoft, and of all the potential candidates, this, of course, is no surprise. (Anybody remember a browser named Netscape?) However, as we've recently discussed here at the Fool, the company has tried to come up with what sounded like reasonable settlements, none of which has pleased the EU.
Even though the decision hasn't yet been reached, so far it is expected that the EU will impose a fine of about $600 million; that figure reportedly also includes Microsoft's U.S. business as well.
According to Reuters, Microsoft responded by saying: "We believe it's unprecedented and inappropriate for the Commission to impose a fine on a Company's U.S. operations when those operations are already regulated by the U.S. government. The conduct at issue has been permitted by both the U.S. Department of Justice and a U.S. court." Additionally, Microsoft claims that it could not have known that it had infringed on EU law and, therefore, should not be fined.
It does seem logical that an EU-imposed fine should only relate to revenues gained in the EU. Unless there's something I'm missing here, the EU basing its fine on U.S. revenues just doesn't feel right. However, just because you've got the law on your side in one country doesn't mean you're not infringing in another, so that second tier seems an empty argument.
It seems it's more the principle than anything else; the fine's pretty minor for a company that's sitting on more than $50 billion in cash. Further, according to EU law, it could have been dearer than it was. There are more pressing matters at hand, such as Microsoft changing its OS to EU specifications -- making it a happy place for competitors like Apple (NASDAQ:AAPL), RealNetworks (NASDAQ:RNWK), and Sun Microsystems (NASDAQ:SUNW).
Get comfortable. It might be a long wait for some closure on this one. As much as the EU seems bent on making an example of it, Microsoft's expected to appeal and push for a settlement more to its liking, which could take years -- and talk about a battle. Because, judging by what has transpired to date, as far as the EU is concerned, Microsoft can do no right.
What do you think of the EU antitrust battle with Microsoft? People are kicking around these and other issues on the Microsoft discussion board.
Alyce Lomax does not own shares of any companies mentioned.
