Microsoft: Where Fines are a Cost of Doing Business

Neelie Kroes ain't pulling her punches:

"Microsoft was the first company in 50 years of E.U. competition policy that the commission has had to fine for failure to comply with an antitrust decision," Ms. Kroes said.

...and so did Microsoft end up on the wrong end of a $1.35 billion antitrust fine from the EU. This is becoming a semi-regular occurrence:

The latest fines come on top of an initial fine of ???497 million that Microsoft was required to pay when first found guilty of monopolistic behavior. Having failed to comply with the commission's ruling, the regulator fined the software giant an additional ???280.5 million in July 2006.
Adding Wednesday's fine, Microsoft will have handed over a total of ???1.68 billion, or $2.5 billion at current exchange rates, to the European antitrust regulator.

One of the more interesting bits of Freakonomics was the experiment that showed parents showing up later to pick their kids up from school when they got fined for doing so. The fine ratifies the behavior, in some way. Or think about a situation where you're going on holiday and won't be back until after your library book is due to be returned. If you know you can pay a fine when you get back, it's possible that you'll think that fine to be "worth it" and therefore take the book with you.

I'm not saying that the benefits of its anticompetitive behavior were worth the $2.5 billion in costs that Microsoft has now garnered. But I do think that at least until very recently it considered these fines something of a cost of doing business. But this fine, along with last week's decision to open up Windows, should, I think, put an end to that. For the time being.

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