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Thursday, 07 March 2013 09:50

Microsoft fined $731 million for code error

Written by Nick Farrell



Don’t miff the EU

Software giant Microsoft is having to write a huge cheque to the EU for failing to stick in a line of code in Windows which allowed rival browsers onto its operating system. 

The European Union fined Microsoft Corp $731 million for ignoring its anti-trust requirements to offer users a choice of Web browser. According to Reuters the fine is being seen as a warning to other big companies not to mess around with the EU anti-trust watchdogs unless you really want to get bitten.

Vole promised in 2009 to ensure that consumers had a choice of how they access the internet, rather than defaulting to Microsoft's Explorer browser. But in May 2011 and July 2012 it forgot to stick the code allowing this under the bonnet of Windows. This meant that 15 million users were forced to download Internet Exploder. The sanction is more than 11 per cent of Microsoft's expected net profit this quarter and one per cent of annual sales. Still Steve Ballmer could have been fined up to 10 per cent of annual global revenue and he is sitting $68 billion in cash reserves. 

Joaquin Almunia, the EU's competition commissioner, told a news conference that if companies agree to offer commitments which then become legally binding, they must do what they have committed to do or face the music. Microsoft said it took full responsibility for the incident, which it has blamed on a technical error -- it forgot to stick the code in.

The board cut chief executive Steve Ballmer's bonus last year partly as a result, and also faulted former Windows head Steven Sinofsky. Vole said that it would not challenge the ruling. [In case you were wondering - Google tipped off Almunia. Ed]

Nick Farrell

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