Microsoft Faces Big Fine, Unlikely to Break Record

Microsoft (MSFT) faces a likely European Commission (search) fine of hundreds of millions of euros next week after the failure of settlement talks on Thursday, but it may not be the biggest ever levied by Brussels.

EU Competition Commissioner Mario Monti (search) told reporters he would propose a fine as part of a ruling to be adopted by the 20-member EU executive next Wednesday that will order Microsoft to change its business practices. He gave no figure.

The biggest antitrust punishment so far was a 462 million euro ($566 million) fine imposed against Roche Holding of Switzerland in November, 2001, for its role in a series of vitamin cartels.

Fines are far more common for cartels, in which companies conspire to fix prices, than for anti-competitive practices.

The Commission computes fines by taking into account the duration and gravity of a violation, the impact on the market and the size of the market. Repeat offenders and those who refuse to co-operate with EU investigations pay more. Sometimes fines are meant to exceed gains, when the gains can be calculated.

Once a fine is calculated the Commission measures it against a legal ceiling, which is 10 percent of company turnover in the year before the decision. Few come close to that amount.

The European Commission says the following are the largest fines it has imposed on individual companies for abuse of dominant position or cartels, all in euros:

1. Hoffman-La Roche AG, 2001, vitamin cartel, 462 million euros

2. BASF AG, 2001, vitamin cartel, 296.16 million

3. Lafarge, 2002, plasterboard cartel, 249.60 million

4. Arjo Wiggins, 2001, carbonless paper, 184.27 million

5. Nintendo, 2002, restrictive distribution practices, 149.128 million

6. BPB, 2002, plasterboard cartel, 138.60 million

7. Degussa Ag, 2002, methionine cartel, 118 million

8. Volkswagen, 1998,-for restrictive distribution practices, 102 million, reduced to 90 million by CFI

9. Hoecht AG, 2003, sorbates cartel, 99 million

10. Knauf, 2002, plasterboard cartel, 85.80 million

11. SGL Carbon, 2001, graphite electrode cartel, 80.2 million

12. Tetra Pak, 1991, abuse of dominant position in liquid pckaging, 75 million

13. Mercedes Benz, 2001, violating rules on car distribution, 72 million

14. ABB, 1998, heating pipes cartel, 70 million

15. UCAR (GraphTech), 2001, graphite electrode cartel, 50.4 million