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Technology / Hardware

8 of the biggest European antitrust fines imposed on tech firms for business practices

As the European Commission flexes its muscles over Google’s Android practices, CBR rounds up some of the biggest fines levelled by Europe against tech firms.

 

1. Microsoft

Year: 2004-2008

Initial fine: €497.2 million

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Added: €860 million

The dispute began with a case brought by Sun Microsystems in 1998, with Sun complaining that Microsoft was abusing its dominant position in the PC market by refusing to provide information that its servers required to work with Windows.

The European Commission found that Microsoft had unlawfully refused to provide the information, preventing competitors from being able to compete in the work group server operating system market.

It also found that Microsoft’s building Windows Media Player into the Windows operating system harmed competition in the streaming media market.

A preliminary decision in 2003 ordered Microsoft to release this information.

The fine came in 2004 with the final decision, with the EU initially fining Microsoft €497.2 million.

In 2008, the EU fined Microsoft an additional €899 million fine for non-compliance with its 2004 obligation to authorise the use of the interoperability information on reasonable and non-discriminatory terms. However, this was reduced to €860 million after the European Commission admitted a miscalculation.

 

2. Microsoft

Year: 2013

Fine: €561 million

Microsoft received another hefty fine in 2013, after breaking another agreement made in 2009. This time the dispute centred on its proprietary Internet browser, Internet Explorer.

Microsoft had agreed to give every Windows user a choice of which browser to set as default when they bought and booted up a Windows PC.

However, in a costly misjudgement, Microsoft set the default to Internet Explorer.

Unfortunately for Microsoft, this decision coincided with a broader consumer shift away from Internet Explorer anyway as alternative browsers such as Mozilla Firefox and Google Chrome began to grow in popularity.

 

3. Sony, Toshiba, Hitachi and others

Year: 2015

Fine: €116 million

The European Commission fined eight optical disk drive suppliers with a total fine of €116 million after they formed a cartel to avoid competition.

On the victim end of the cartel were Dell and HP, whose procurement tenders for the drives were damaged after the suppliers colluded to avoid competing.

The eight suppliers were Philips, Lite-On, their joint venture Philips & Lite-On Digital Solutions, Hitachi-LG Data Storage, Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage.

 

4. Intel

Year: 2009

Fine: €1.06 billion

The European Commission fined Intel in 2009 for abusing its dominant position in the market between 2002 and 2007, when it was believed to have excluded competitor Advanced Micro Devices AMD from the market for x86 central processing units.

Intel was found to have a market position of 70 percent, and major computer manufacturers were given rebates for purchasing x86 CPUs from Intel, skewing the market. Intel directly paid Media-Saturn on the condition that its computers exclusively contained Intel CPUs.

It was also found that Intel paid HP, Acer and Lenovo conditional on them cancelling or postponing the launch of AMD CPU products.

The Commission believed that this prevented Intel’s competitors competing on the merits of their own CPUs and reduced the variety available.

 

5. Telefonica

Year: 2007

Fine: €152 million

The telecoms operator was fined by the European Commission for overcharging competitors for wholesale broadband access in Spain.

The telco was said to have restricted competition in the market between September 2001 and December 2006 by fixing the wholesale price for ADSL close to its retail price.

This had left no margin for competitors to make a profit, the Commission argued.

The fine came after fines against Deutsche Telekom for similar practices failed to scare off Telefonica.

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6. Google

Year: 2016

Fine: Pending (€6.58 billion)

Google has been charged by the European Commission with abusing the dominant market position of Android amongst mobile operating systems.

Smartphone makers using Android under license from Google have been required to load 11 core Google apps onto the phone before sale. They are needed to be one swipe away from the home screen and cannot be deleted.

Margrethe Vestager, European Competition Commissioner, argued that Google’s behaviour denies consumers a choice of applications in a market where Android holds about 80 percent of the smartphone and tablet.

The maximum fine could be 10 percent of global revenue. Google made $74.5 billion in revenue in the previous fiscal year, meaning the fine could be $7.45 billion or €6.58 billion.

 

7. Qualcomm

Year: 2015

Fine: Pending (€2.21 billion)

The European Commission in December charged Qualcomm with illegally paying a major customer for exclusively using Qualcomm chipsets and selling chipsets below cost with the aim of forcing its competitor Icera out of the market.

The Commission said its preliminary view was that the conduct had reduced the manufacturer’s incentives to source chipsets from Qualcomm’s competitors. It said that this has harmed competition and innovation in the markets for UMTS and LTE baseband chipsets.

The Commission also found that between 2009 and 2011 Qualcomm engaged in ‘predatory pricing’, selling certain baseband chipsets at prices below costs in order to hinder competition in the market.

 

8. LG, Samsung, Panasonic and others

Year: 2012

Fine: €1.47 billion

Seven international groups were fined by the European Commission for participating in one or both of two cartels in the cathode ray tube sector.

These companies were found to have colluded by fixing prices, sharing markets, allocating customers between themselves and restricting outputs.

Involved were Chunghwa, LG Electronics, Philips and Samsung SDI, who participated in both cartels, while Panasonic, Toshiba, MTPD (currently a Panasonic subsidiary) and Technicolor (formerly Thomson).

 
This article is from the CBROnline archive: some formatting and images may not be present.