European Union states on Monday backed a proposal to fine Microsoft Corp. a record 497 million euros ($613.5 million) for abusing its dominance of PC operating systems, an EU member state source said. "It is 497 (million euros)," the source told Reuters. If the full European Commission backs the fine as expected on Wednesday it would exceed the 462 million euro penalty imposed on Hoffman-La Roche AG in 2001 for being ringleader of a vitamin cartel. Microsoft associate general counsel for Europe Horacio Gutierrez said in a statement the fine was unjustified.
"We believe it"s unprecedented and inappropriate for the Commission to impose a fine on a company"s U.S. operations when those operations are already regulated by the U.S. government and the conduct at issue has been permitted by both the Department of Justice and the U.S. courts," he said. Microsoft reiterated plans to appeal. As well as the fine, Microsoft is to be ordered to offer a version of its Windows operating system without Windows Media Player and to encourage computer makers to provide other audiovisual software. It must also license information to make the servers of rivals more compatible with Windows desktop machines.