RealTime IT News

Decision Time For Microsoft on $1.35 Billion Fine

Microsoft CEO Steve Ballmer hasn't seemed like his old self lately.

The charismatic head of the software giant has been known for most of the past 20 plus years as hyper to the point of eccentricity – and virtually always cheerful.

But onstage during Wednesday's launch of the company's latest versions of its major server products in Los Angeles, Ballmer appeared more reserved than normal. His constant pacing across the stage as he talked was there, but he hardly broke a smile throughout his keynote speech, and the overt enthusiasm that has always characterized his presence both on and offstage was somehow lacking.

That may have something to do with a different announcement on Wednesday, this one half a world away in Brussels, home of the European Union (EU). In what may be the final stage of the company's long-running antitrust case with the European Commission's (EC), Microsoft was fined a record $1.35 billion.

The EC decided that Microsoft had overcharged third-party companies for patent licenses over an almost year and a half period.

True, the fine was levied for behaviors that the EC admits have been remedied, as of last fall.

Still, at a point when Microsoft has been steadfastly trying to cut the load of litigation that seems to pursue it everywhere these days, being the recipient of the largest fine in EC antitrust history is definitely something likely to take the breath out of even the usually exuberant Ballmer.

Microsoft has not yet decided whether it will appeal the fine, but emphasized that the penalties are for past behaviors that it has since settled with the EC. Now, it's just time to pay the final bill – or not.

"We are reviewing the Commission’s action. The Commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about past issues that have been resolved," a Microsoft spokesperson said in a statement. The spokesperson would not say whether the company is considering an appeal of the fine.

Some analysts believe Microsoft is likely to appeal this latest fine, given the amount of money involved.

"It would not surprise me if they appealed [the fine because] it's a lot of money, even for Microsoft," Tom McQuail, head of the antitrust practice for legal firm Howrey LLP in London, told InternetNews.com.

Tim Bajarin, president of Silicon Valley consultancy Creative Strategies, is even more emphatic. "I'd be very surprised if Microsoft doesn't fight this," he told InternetNews.com.

Still, given Microsoft's recent spate of legal losses, particularly in the area of antitrust, the company has plenty of reasons to be circumspect about such a decision. For one, the judge overseeing Microsoft's antitrust settlement in the U.S. recently extended oversight of the company's consent decree for another two years.

"I think they will look very carefully to see if there are good grounds to appeal," McQuail added.