Breaking News: Microsoft antitrust verdict – guilty and €497m fine

Microsoft has been hit with a record €497m fine and will be forced to sell an alternative unbundled version of Windows in Europe after being found guilty of anti-competitive behaviour by the European Commission today.

EC competition commissioner Mario Monti delivered the verdict at a press conference in Brussels. He said the ruling had not been reached "easily or hastily" – an understatement considering the five years it has taken.

"The Commission has taken a decision that Microsoft has abused its virtual monopoly power over the PC desktop in Europe," he said.

Microsoft failed to reach agreement with the EC in talks last week over future conduct in the market and the remedies now imposed include offering a version of Windows for the desktop that does not include Windows Media Player. It now has 90 days to offer the stripped-down version to computer manufacturers.

Critically the EC has not set a price discount for the unbundled version – meaning the alternative Windows will be offered at the same price.

"We are not price regulators. We believe that competition puts a pressure on prices to be lower than they would be in a non-competitive scenario," said Monti.

Microsoft has also been ordered to open up its source code to rivals to make it easier for their products to interoperate with Windows.

The fine represents 1.67 per cent of Microsoft's worldwide revenues last year but is some way below the 10 per cent maximum the Commission could have imposed. Microsoft has 90 days to pay the fine.

A condition has also been set that Microsoft must not offer a discount to PC manufacturers to carry the version of Windows bundled with Windows Media Player.