Microsoft’s contribution to the EU budget
Today the European Commission imposed a 561 million euros fine on Microsoft (roughly 37 euros per each of the 15 million copies of Windows that were sold in the EU in breach of the 2009 commitment).
As I said in a previous post, I don’t think anyone believes that Microsoft did this on purpose, so the amount of the fine might have come as a surprise to quite a few people (although not to those who participated in Nico’s poll yesterday).
In any case, this is the third time that Microsoft contributes to the EU Budget because of competition related matters. In total, it has paid approximately 2 billion euros.
[Btw, I couldn’t help remembering Neelie Kroes statement after fining Intel 1 billion euros: “Intel´s latest advertising campaign proposes Intel as the sponsors of tomorrow; well, now they are the sponsors of the European tax payer” (two years ago we nominated the video of this speech to an Antitrust Oscar)].
When one hears about these figures it’s easy not to realize what numbers mean. So we’ve decided to help you become aware of what 2 billion represent:
According to the World Bank there are 41 countries in the world whose GDP is lower than 2.1 billion euros (approx 2.7 billion dollars).
With 2 billion euros the European Union could:
– Bail out banks in Cyprus (estimates say that it will cost up to 2 billion);
– Pay for a couple of ambitious science projects (like studying graphene and fighting brain disease);
– Buy the full squads of Real Madrid, FC Barcelona or Manchester United to represent DG Comp in the internal football championship;
– Buy half of an aircraft carrier (don’t know why they would want an aircraft carrier, or why they would only want half, but I’ve seen more absurd public spending…);
– Pay DG Comp’s budget (93,5 million euros) for 21 years;
– Develop the atomic bomb (not in today’s money, though; it cost 2 billion back in 1945).
– Buy a few Greek islands for its officials to go on holidays (the most expensive one I’ve seen here costs 150 million..). Odd thing, I saw an ad for Bahamas islands on sale, and there is a private islands magazine with a Fall/Winter catalog for islands (!)
– Produce all of the 10 most expensive films in history (Pirate’s of the Caribbean, Tangled, Spider-Man 3, John Carter, Harry Potter and the Half Blood Prince, Avatar, The Dark Knight Rises, The Chronicles of Narnia: Prince Caspian, Pirates of the Caribbean: Dead Man’s Chest and The Avengers).
– Build the tallest building in the world to host DG Comp (it would be more impressive than the Madou Tower to which it is moving…the Burj Khalifa costed 1.5 billion). For my suggestion on how it could look like, see here 🙂
Anymore ideas??
Chillin'Competition 
The Commission buys Opera (573 million €) and Zynga (1.6 billion €). The use of Opera is then made compulsory throughout Europe as the Commission needs all of its ressources to implement its new “Common Agricultural Policy”.
Microsoft (fined 1.0 % of its turnover) could have broken seven seals during an investigation by the Commission (see E.ON: 1 seal = 0.14 % of the turnover).
AX
6 March 2013 at 10:26 pm
Establishment of DG-comp space agency and launch voyages of space exploration to probe a possible implementation of competition law in other galaxies !!
Mansour
6 March 2013 at 10:28 pm
1666 new ferrari supercar F150 http://bit.ly/13GWFJF. More than one for each employee at DG Comp.
Valentin
7 March 2013 at 10:14 am
John Carter is one of the most expensive movies? You must be joking 🙂 I will add one more idea: we could invest in highways in Poland!
Magdalena
7 March 2013 at 1:45 pm
Microsoft, DG Comp and PCRT (Producers of cathode ray tubes) could announce one of the biggest joint venture in the market.
According to the last DG Comp decision, on 6th of March Microsoft was invited to grow up his participation at 2 bil euro while PCRT will remain for the momment at 1,4 bil euro.
DG Comp brought his good will and a new web browser as competition improvement.
George
7 March 2013 at 3:17 pm
[…] this week amounted to 37 Euros per copy of Windows sold in violation of the EC’s order, and other musings on the scope of Microsoft’s EU […]
Antitrust Links of the Week « News « UpwardPricingPressure
9 March 2013 at 12:49 am
I was told by a relatively reliable source that Microsoft have built up a €20bn fund over the years precisely for paying fines for competition (and regulatory) infringments. If this is true, it is hard to imagine these fines having much of a deterrent deterrent effect.
SM
10 March 2013 at 12:49 pm
You’d need to discount the Commission’s own cost of running all these investigations, though. I believe DG Comp people now need to record their hours, so they must have some idea of the cost. It’d be interesting to be able to compare the costs of different procedures (eg commitments vs full decision in 102 case; cartel settlement of full procedure; merger phase I vs phase II).
The next question is who should bear that cost? Should filing fees be introduced for mergers? Should a commitment decision include the payment of a fee (as opposed to a fine) for the enforcer’s costs? Or should the taxpayer bear those costs?
Geoff
11 March 2013 at 12:38 pm
[…] This is the first case of fines being imposed for failure to comply with commitments required by the EC. In part because of Microsoft’s compliance, the fine imposed was well below the maximum level it could have been. However, it still means that Microsoft has now in total contributed enough to the EC’s coffers to cover the competition department’s budget for over 20 years. […]
The Sloman Economics News Site » Blog Archive » Microsoft breaks promise to the European Commission
22 December 2014 at 2:46 pm