EU fines Microsoft, orders new version of Windows

The European Union fined Microsoft Corp. more than $800 million Wednesday, ruling that the company had abused its "near monopoly" on computer operating systems.

It also gave the software giant 90 days to offer a new version of its Windows operating software, and 120 days to hand over some programming code to rival software manufacturers.

Microsoft plans to appeal the rulings.

"Dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition ... and does not harm consumers and innovation," said EU Competition Commissioner Mario Monti.

"Today's decision restores the conditions for fair competition in the markets concerned and establishes clear principles for the future conduct of a company with such a strong dominant position."

The penalties and 497.2 million euro fine were assessed after talks between the EU and Microsoft officials broke down last week.

The commission found that Microsoft, whose operating systems power about 90 per cent of the world's personal computers, took advantage of its market dominance by including its digital media player in updated versions of Windows.

It gave the U.S.-based company three months to provide manufacturers with a version of Windows that doesn't include the media player, and warned that the new version must not be "less attractive or performing" than the one that includes it.

The ruling also said that Microsoft acted improperly by refusing to give its server software code to competitors. That code could allow rival software makers to create programs that work with Windows just as efficiently as Microsoft products.

The company's unwillingness to share the server software code was "part of a broader strategy designed to shut competitors out of the market," the commission said.