This set of flagpoles sits at one of the = entrances to=20 Microsoft Corporation in Redmond, Wash., Monday, Oct.19, 1998. The = European=20 Union is fining Microsoft Corp. $1.3 billion for charging rivals too = much for=20 software information. EU regulators say the company charged = "unreasonable=20 prices" to software developers who wanted to make products compatible = with the=20 Windows operating system. The fine is the largest ever for a single = company=20 and the first time the EU has penalized a business for failing to obey = an=20 antitrust order. (Joe Brockert - AP) =

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By K= evin=20 Sullivan

Washington Post Foreign Service
Thursday, February = 28,=20 2008; Page D01

LONDON, Feb. 27 -- European Union antitrust regulators fined Microsoft $1.3 billion on Wednesday, the largest fine = they have=20 ever imposed on a company, in the latest round of a nearly decade-long = dispute=20 in which the U.S. software giant was accused of abusing its global = market=20 dominance.

"Microsoft's behavior did not just harm a few individuals or a = handful of big=20 companies," said Neelie Kroes, the E.U.'s competition commissioner, = announcing the=20 decision in Brussels. "Directly and indirectly this had negative = effects on=20 millions of offices in companies and governments around the world."

The fine was the third the E.U. has levied against Microsoft in the = same=20 dispute -- once after being found to have violated antitrust law, and = twice,=20 including this latest, for what officials called a refusal to comply = with orders=20 to change its practices.

In a statement, Microsoft said that it was reviewing the decision but = that=20 "these fines are about past issues that have been resolved." The company = pointed=20 to its announcement last week that it would make technical data on its = products=20 more accessible to competitors, a key aspect of the European complaints. = "We are=20 focusing on steps that will improve things for the future," Microsoft = said.

Roger Kay, president of research and consultancy firm Endpoint = Technologies=20 Associates, said the ruling showed differing approaches to antitrust in = the=20 United States and Europe. "In the U.S., the electorate has decided to = leave big=20 business alone to figure out how things should be done best. In Europe, = it's the=20 other way around."

European regulators have now fined Microsoft a total of about $2.5 = billion=20 (at current exchange rates). Kroes said it is the first company ever to = refuse=20 to comply with a European Commission antitrust ruling.

"That the commission has been forced to levy these three fines = reflects a=20 clear disregard by Microsoft of its legal obligations," Kroes said. "The = commission's fine is a reasonable response to a series of quite = unreasonable=20 actions."

She said her message to Microsoft and other companies was: "Talk is = cheap;=20 flouting the rules is expensive. We don't want talk and promises -- we = want=20 compliance."

Analysts said that even though the fine was exceptionally large, it = was more=20 of a warning to other companies than a financial burden on the world's = leading=20 computer software maker.

"Financially it's not significant; it is much more of a scary number = to=20 everybody else than it is to Microsoft," said David B. Yoffie, a = professor at Harvard Business School.

Yoffie said E.U. regulators were using Microsoft to send a strong = warning to=20 other companies to heed European regulations. He said E.U. regulators = are=20 currently probing U.S. technology companies such as Google, Qualcomm, Intel and Rambus. Microsoft itself is facing two new E.U. = antitrust=20 investigations that began in January.

Iain Begg, a professor at the European Institute of the London School = of=20 Economics, said the fine may not hurt Microsoft, "but it's still enough = to say=20 to other companies, 'Don't mess with us, and if you do we'll hit you = with fines=20 that your shareholders will squeal about.' "

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E.U. Slaps Third Fine on Microsoft

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