Europe threatens new Microsoft fines
BRUSSELS, Belgium - The European Union escalated its trans-Atlantic fight with Microsoft Corp. on Thursday, threatening new multimillion fines against the software maker over claims it is asking rivals to pay too much for information that would help their servers work with Windows.
Context & Ripple Effects
Microsoft enters March 2007 squeezed from two directions at once: Brussels is threatening fresh multimillion-dollar fines over what it charges rival server makers for the protocol information needed to make their products work with Windows, and a week earlier a US judge ordered the company to hand $1.5 billion to Alcatel-Lucent in the MP3 patent case. The EU threat escalates a long-running trans-Atlantic fight rather than opening a new front — the dispute is specifically about the price of interop data, not its existence.
First-order effects
- Rival server vendors buying Windows interoperability information face a regulator now openly questioning whether Microsoft's licensing rates are lawful, shifting leverage toward them in rate negotiations.
- Microsoft carries a live exposure to additional multimillion-dollar EU penalties on top of the $1.5 billion Alcatel-Lucent award ordered days earlier.
Second-order effects
- If Brussels forces lower interop fees, rival workgroup-server products get cheaper to build against Windows, tightening competition in exactly the market segment Microsoft dominates.
- Other jurisdictions watching the case gain a tested playbook for policing the price — not just the availability — of interface information held by dominant platform owners.
Third-order effects
- The case points toward interoperability data being treated as quasi-essential infrastructure, where a dominant vendor's control of interfaces becomes subject to ongoing regulatory price oversight rather than one-off remedies.
The trend: Antitrust enforcers are moving from forcing dominant platforms to share interoperability information to regulating the terms and price on which it is shared.