Now it’s Microsoft’s turn to face the European Union and pay exorbitant fines. The updated Microsoft software failed to offer users a choice for browsers but instead defaulted to Internet Explorer, giving it an unfair advantage over other browsers like Firefox or Chrome.
These fines are opening old wounds for Microsoft, which faced the exact same problems in 2009 when the EU originally accused them of violating antitrust regulations. The company complied and quickly set up a browser ballot for users. The ballot provides five different browser options to choose from, thus leveling the playing field.
Unfortunately for Microsoft, when it updated its software in February 2011, it didn’t include the browser ballot, automatically sticking users with IE for almost a year and a half. Now the EU is levying a fine on them for violating the previous settlement.
Many words have been used to describe Microsoft’s oversight (or mistake, fiasco, shenanigans, glitch, complete failure, etc.) but the unanimous word is expensive. This error could cost them billions of dollars – anywhere up to $9 billion.
Microsoft isn’t the only tech giant writing a check out to the EU. Google is looking to shell out up to $1 billion dollars for violating the privacy of European citizens. Just like Google, the European Union is looking to make an example out of Microsoft. By imposing hefty fines on major Internet companies they’re creating a precedent for future cases and becoming world leaders in Internet legislation. Google’s case may affect the privacy of consumers and Microsoft’s may affects corporations, but they’re really just different tentacles on the same octopus.
However, Tim Worstall of Forbes questions whether fining corporations obscene amounts of money is really the way to go. He sees the special interest in it. Rather than the government planning for the technological future, he questions whether this isn’t a great revenue-generating tactic:
For all governments always exploit new revenue sources. And even better if there isn’t some taxpayer seeing his pocket getting lighter who will then complain. And that does bother me: for we are seeing regulators of various types fining companies more money more often.
This isn’t the first time that argument has been made – for both the US government and the EU. Andrew Longstreth wrote:
At a time when the federal government is facing fiscal challenges, it is receiving record amounts of revenue from at least one source: criminal fines and penalties paid by major corporations
In a way, governments are starting to impose fines in the same way record companies sue for copyright infringement. The average teenager downloading songs illegally has no money; it doesn’t make sense to go after him. Instead they go after file-sharing companies for trillions of dollars. Why should governments raise taxes on already struggling Americans when they can go after the major corporations rolling in profits?
The debate between legislation versus revenue is an interesting can of worms to open. Do you think governments have found their new favorite revenue source? Or do you stand by the EU setting a strict precedent. How about a little bit of both?
Personally, I think the EU just hates using Internet Explorer as much as the rest of the world.