On March 25, 2004, the European Commission issued a decision in its
competition law investigation of us. The Commission concluded that we
infringed European competition law by refusing to provide our
competitors with licenses to certain protocol technology in the Windows
server operating systems and by including streaming media playback
functionality in Windows desktop operating systems. The Commission
ordered us to make the relevant licenses to our technology available to
our competitors and to develop and make available a version of the
Windows desktop operating system that does not include specified
software relating to media playback. The decision also imposed a fine
of €497 million, which resulted in a charge in the third quarter of fiscal
year 2004 of €497 million ($605 million).
We filed an appeal of the decision to the Court of First Instance on
June 6, 2004.
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