Microsoft Fined by EU

Elena
12 Jul, 2006
New York City

In addition, the EU threatened penalties of $3.82 million a day beginning July 31 unless the company supplies

[R]8:00AM Microsoft was fined $357 million by the EU.[/R]
Microsoft Corp. ((MSFT)) was fined $357 million by the EU because the software maker failed to obey a 2004 antitrust order to share program code with rivals. In addition, the EU threatened penalties of $3.82 million a day beginning July 31 unless the company supplies ‘complete and accurate’ technical information to developers to help them make smoothly working software with its ubiquitous Windows operating system.

Microsoft immediately said it would appeal the fine in court and ask if the ‘unprecedented’ fine was justified.

The company said it has a team of 300 people working full-time on a framework to supply the information and six of seven installments have already been delivered. Microsoft General Counsel Brad Smith said despite the fines, Microsoft ‘remains totally committed to full compliance’ with the 2004 antitrust decision, adding that the company had handed over 'thousands of pages' of technical documents to EU experts. He said claims made by the EU were unfair and that revisions of requested information were delivered ‘promptly.’

The EU imposed daily fines of 1.5 million euros ($1.91 million) from Dec. 15 to June 20 when it decided that Microsoft was still violating EU law. The EU had already imposed a record 497 million euro ($613 million) fine on Microsoft in 2004 and ordered it to hand over communications code to rivals.

In the first quarter Microsoft earned $2.98 billion on revenues of $10.9 billion. The EU can fine a company up to 5% of its annual global revenue. This would mean a fine of 4.28 million euros ($5.47 million) a day out of Microsoft''s daily revenue of 85.7 million euros ($109.47 million).


[R]7:30AM Asian markets end mostly lower.[/R]
Asian markets ended mostly lower on Wednesday. The Nikkei 225 Average in Tokyo ended lower 1.45% at 15,249.32. Data from the Bank of Japan released Wednesday showed Japan''s domestic corporate goods prices rose 3.3% in June from a year earlier, marking the 28th consecutive monthly increase. Honda Motor led decliners among Japanese automotives, falling 2.5%. Shares of Toyota Motor traded down 1.3%, while Nissan Motor retreated 1.4%.

Hong Kong''s Hang Seng Index reversed early loses to close 0.19% up at 16,522.21. The China Enterprises Index, which tracks Hong Kong-listed shares of companies incorporated on the mainland, advanced 0.38% at 6,826.65. The index had traded flat for much of the day. Hong Kong''s flagship carrier Cathay Pacific Airways which recently won expanded landing rights in China, was up 0.36%.

In Seoul, the Korea Composite Stock Price Index, or Kospi, closed down 0.3% at 1296.69. Telecom shares ended weaker on expectations of poor second-quarter results after companies were fined in late June for offering illegal subsidies to attract customers and increased expenses for marketing, analysts said. SK Telecom, South Korea wireless operator, ended down 1.5% and KT Freetel lost 3.9%.


[R]6:30AM Europe extends early gains by mi-morning.[/R]
European markets were higher by mid-morning. The U.K. FTSE 100 index gained 0.4% at 5,882, the German DAX Xetra increased 0.9% at 5,663 and the French CAC-40 index rose 0.6% at 4,945. U.K. retailer and business services group GUS advanced 1.2% after it said that same-store sales in the three months ending June 30 at its Argos retail division advanced 7%. Luxury goods supplier Burberry Group increased 1.3% reporting that underlying revenue climbed 12% in its first quarter.

Alcatel which fell 5.9% on Tuesday after soon-to-be-acquired Lucent Technologies warned of a revenue shortfall, inched up 0.3%. U.K. oil company BP fell 0.2%, despite rises for most of the energy sector with oil trading above $74 a barrel, after it reportedly is planning to take a $1 billion stake in Russian oil company Rosneft. Switzerland’s Roche rose 1.1% after majority-owned Genentech reported an 80% profit rise and lifted its fiscal-year earnings guidance.

Oil prices stood firm at above $74 a barrel, raising gold''s attractiveness as a hedge against inflation. Gold traded on Wednesday near five-week highs, supported by firm oil prices and nervousness following bomb attacks which killed more than 180 people in India''s financial hub of Mumbai. Gold was quoted at $642.00/643.00 an ounce by 0958 GMT, against $642.10/644.10 late in New York. The dollar was trading at 114.37 yen in Tokyo mid-afternoon, up 0.26 yen from late Tuesday in New York. The euro fell to $1.2768 from $1.2771.