Microsoft's problems with the US government are well documented, but the company also faces antitrust probes from the European Commission (EC), the European Union (EU) executive branch responsible for regulating competition on the continent. Late last year, the EC announced that it would merge its two Microsoft investigations to speed the legal process and present a consolidated stand against the software giant.

The European regulators first investigated Microsoft's server business in 1998, when Sun Microsystems complained that Microsoft's desktop monopoly gave Microsoft an unfair advantage in other markets. Sun alleged that Microsoft was withholding information about Windows NT that Sun and other Microsoft competitors needed to make compatible servers and services—an abuse of Microsoft's market power. In February 2000, the EC announced a second investigation, this time focusing on Windows 2000. The consolidation brings the Win2K investigation into the earlier antitrust inquiry.

If the EC finds Microsoft guilty of the charges, the imposed fine could be as much as 10 percent of the company's global annual sales. Microsoft made almost $23 billion in fiscal 2000, so an EC fine could conceivably exceed $2 billion (although the EC has yet to impose such a fine on any company). Microsoft recently filed its official response to the charges in Europe, though these documents have not been made public.

Corrections to this Article:
  • News Analysis: "European Commission Merges Microsoft Investigations" (April 2001) prematurely reported that the European Commission (EC) had decided to merge its two Microsoft investigations. The EC took such action in August. We apologize for any inconvenience these errors might have caused.