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ECONOMICS REPORT - Microsoft, the EU and Facebook

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This is the VOA Special English Economics Report.

This week, Microsoft agreed to end its fight against European Union competition officials. The world's largest software company withdrew its remaining appeals at a European court.

European Commissioner for Competition Neelie Kroes negotiated the agreement with Microsoft
European Commissioner for Competition Neelie Kroes negotiated the agreement with Microsoft

Microsoft has faced record European Union fines and may still owe more. But it says it wants to put its energies into meeting its legal duties and strengthening its relationship with the European Commission.

In two thousand four, the commission ordered Microsoft to share information with competitors. This information would help them develop software for server computers to "interoperate," or work easily, with Windows.

Windows is the Microsoft operating system found on more than ninety percent of personal computers. The company argued that it needed to protect trade secrets.

But now, Microsoft has agreed to share secret information with developers for a one-time payment of ten thousand euros. That is about fourteen thousand dollars at current exchange rates.

Microsoft also wanted to charge competitors almost six percent of the sales from products that use its information. But in the end it agreed to charge less than half a percent for worldwide use.

The European Union began to investigate Microsoft in nineteen ninety-eight after Sun Microsystems accused the company of being anti-competitive. Microsoft, based in Redmond, Washington, fought back. But last month, it lost a big ruling. The second-highest court in the European Union agreed that Microsoft abused its market position.

In a separate case, Microsoft decided last week not to appeal a thirty-four million dollar fine by the Fair Trade Commission in South Korea.

But Microsoft could at least claim a victory in one of its efforts to expand its Internet business. This week it won the right to invest in Facebook and to expand an advertising partnership with the social networking site. Facebook chose Microsoft over Google, the leading Internet search company.

Microsoft will invest two hundred forty million dollars to buy a one and one-half percent interest. Microsoft values Facebook at fifteen billion dollars. Facebook reportedly expects about one hundred fifty million dollars in revenue this year. The company will be four years old in February and says the site has almost fifty million active users.

And that's the VOA Special English Economics Report, written by Mario Ritter. Our reports are online with transcripts at www.unsv.com. I'm Jim Tedder.

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