Another EU fine! Is Microsoft insane?

Insanity, according to Narcotics Anonymous, "is repeating the same mistakes and expecting different results." If that's true then Microsoft has apparently gone nuts.

The company's first mistake was prior to 2009 when it was found guilty by the European Commission, the European Union's executive branch, of unfairly using its dominance in the PC market.

[BACKGROUND: Microsoft fined $731 million by European Commission]

This guilt-finding was, by no means, a quick process, having taken a decade of court cases and costing both Microsoft and the EC huge legal costs in the process. The conclusion of this monumental litigation was, yes, Microsoft had been a bad boy and it was going to have to change its evil ways and start offering users a choice of Web browsers when Windows was installed.

Oh, it had to pay a fine to the tune of ¬860 million (that's about $1.1 billion)! Ouch.

So, what did the EC just decide Microsoft is guilty of all over again? You guessed it: Exactly the same thing! This time Microsoft was found guilty over the period from May 2011 to June 2012 of allowing over 15 million Windows 7 installations to default to installing Microsoft's own Web browser.

The penalty? Another fine, this time for ¬561 million (that's $729 million)! Together these fines amount to ¬1,421 million! By the time the company has paid these, along with other penalties incurred since 1998, Microsoft will have paid $2.2 billion in fines!

According to the Washington Post, Anthony Sabino, an antitrust lawyer and professor at St. John's University, "the Commission was right to fine Microsoft for the latest lapse, but the size of the penalty seemed 'disproportionate...perhaps even petty, given that Microsoft has paid its fines and yielded to all the demands of the EU.'"

Here's the crazy thing: All of this was over something that was, in the first place, pretty ridiculous given that users have to know that other browsers are available and should be perfectly capable of pointing their installed Microsoft browser at any of the alternatives and installing one or more of those instead. This means that the EU's case was really a stick to beat Microsoft with given that other charges of monopolistic behavior could well have been far harder to prove.

[Retro browser war: IE6 vs Netscape]

What amazes me is Microsoft's response to the latest fine; a mea culpa if ever there was one. The company apparently has no intention to appeal and issued a statement saying, "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."

A "mistake"?! Given the huge number of product managers at Microsoft and the legions of lawyers employed to keep the company on the straight and narrow how do you make such a biblically stupid mistake? There had to be a requirements document, and at least one section had to cover legal issues, so it is hard to believe they missed the need to offer a choice of browsers.

Moreover, Microsoft referred to the mistake as a "technical error" which implies the installation process did include something like a browser choice section that didn't work properly. I find it very hard to believe such a thing would pass Microsoft's quality assurance process and that it was just an oversight; a "whoops, we goofed."

Could it be that Microsoft was just testing the EU regulators to see if it could get away with it? If it could have, then it could have set a precedent for future pushing of the limits of what the EU would tolerate. If that was what Microsoft was doing, wow! What an outrageously expensive mistake. Whose head will roll? And if it wasn't testing the EU regulators and it was, indeed, a technical error, whose head will roll? Either way, it sure looks like insanity.

Gibbs has made his diagnosis in Ventura, Calif. Your prescription to backspin@gibbs.com and follow him on Twitter and App.net (@quistuipater) and on Facebook (quistuipater) and check out the Tech Predictions blog.

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1 Comment

DJ

1

Microsoft count their money by the billions not by the millions. Any fine less than $1b hardly registers with them. 15 million Win 7 installations in that time (over more than a year) & nobody at Microsoft or the press noticed? Mistakes do happen. A few weeks or even a few months would be believable. I don't believe them & neither did the Commission

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