The European Commission this morning fined Microsoft 561 million euros, approximately $732 million, for neglecting to include a required “browser ballot” in Windows 7 for the better part of a year —the first time the commission has fined a company for failing to comply with an antitrust ruling.
That’s almost 1 percent of Microsoft’s annual revenue of $73.72 billion for its 2012 fiscal year.
“Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems. Of course, such decisions require strict compliance,” said EU antitrust commissioner Joaquín Almunia in a statement. “A failure to comply is a very serious infringement that must be sanctioned accordingly.”
Regulators had been investigating the company over its failure to include a required “browser ballot” in a Windows 7 update. The ballot was a required by the company’s 2009 EU antitrust settlement — designed to level the playing field between Microsoft’s Internet Explorer and competing browsers.
Microsoft issued this statement on the fine: “We take full responsibility for the technical error that caused this problem and have apologized for it. We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future.”
The company had distributed an update with the browser ballot, retained outside counsel to investigate the situation, and offered to extend the length of the agreement with the commission for 15 months beyond the original plan.
The mistake was one of the reasons cited by Microsoft’s board when it gave Steve Ballmer and then-Windows chief Steven Sinofsky bonuses that were less than their targets for last year.
EU regulators can impose fines of up to 10 percent of annual revenue, which would have been more than $7 billion based on Microsoft’s fiscal 2012 results. The Redmond company had more than $68 billion in cash and short term investments as of Dec. 31, 2012.