Google tip-off leads to Microsoft EU penalty - Financial Times

Google has struck a €561m blow to Microsoft after the EU's competition authority heavily fined the maker of Windows for settlement breaches secretly flagged up by the US internet group. Brussels punished Microsoft for failing to give at least 15m consumers a choice of web browser – a violation of a voluntary antitrust pact that was spotted and raised by Google and Opera, according to several people familiar with the case. The hefty sanction issued by Joaquín Almunia, the EU's antitrust enforcer, is a serious financial and reputational setback for Microsoft, which carries a special sting given the whistleblowing role of its arch rival Google. Microsoft had already paid about €1.6bn in fines in Europe through its decade-long feud with Brussels. Lately it has largely shed its image as antitrust delinquent to become the main cheerleader for regulatory action against Google's search business. Brussels has never before punished a group for breaching a settlement. Mr Almunia said the €561 fine was intended to "punish and deter", saying companies "must do what they committed to do or face the consequences". It represents about 1 per cent of Microsoft's global turnover. This is a double-edged victory for Google, however, given it is in the later stages of its own EU settlement negotiations. Microsoft's lapse, which went unnoticed for more than a year, is prompting Mr Almunia to consider putting more rigorous monitoring conditions in future deals. In an indirect reference to the talks with Google over its search business, the Spanish commissioner said he had asked his staff "to be extremely careful about how we design the monitoring and compliance" provisions of antitrust pacts. Microsoft last year apologised for inadvertently breaching its 2009 deal with Brussels to end a long-running investigation. It had promised to offer buyers of new PCs in Europe a choice of internet browser, rather than making its own IE browser the default choice. The US software group was left to police its own compliance and Mr Almunia said the lapse was brought to his attention by a Microsoft rival. According to people involved, Google and Opera informally provided the tip-off and helped investigators. Settlements are favoured by Mr Almunia as a tool to correct market issues relatively swiftly compared to a full decision procedure, which can often outlast the perceived problem. But their utility rests on companies sticking to their promises. Following the fine, Microsoft said: "We take full responsibility for the technical error that caused this problem and have apologised for it." The episode was cited as a reason for giving Steve Ballmer, chief executive, only half his potential bonus last year. Opera said it was "happy to see that the Commission is enforcing compliance with the commitment, which is critical to ensuring a genuine choice among web browsers for consumers". Google declined to comment. Copyright The Financial Times Limited 2013. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE9ErMx29sheXZ24S_d8SK2hT-Lag&url=http://www.ft.com/cms/s/0/e748bfc8-8682-11e2-b907-00144feabdc0.html

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