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Microsoft board sued over $731 European fine

Borders do not restrict business and commercial disputes in Minnesota or the United States. Different laws, and now technology, complicate these international business disputes.

A Microsoft shareholder filed a lawsuit in Seattle on April 11 against its board over its handling of an Internet Explorer browser error that led the European Union to impose a $731 million antitrust fine -- the largest the EU ever imposed for antitrust violations -- against Microsoft in March 2013. This suit is the first business litigation over the EU action.

The EU claimed that Microsoft broke its 2009 legal commitment that European consumers would have a choice on Internet access instead of defaulting to Microsoft's Internet Explorer browser. The EU's European Commission, responsible for antitrust matters, had never imposed a fine earlier because a company did not meet its commitments until this action.

The EU found 15 million users did not have this access choice because of updated software issued between May 2011 and July 2012. European computer screens prevented a ballot screen from appearing. Sources said it was connected to updated Windows 7 software.

This lawsuit was filed in the U.S. District Court. The plaintiff claimed that Microsoft's board and directors, along with the company's founder and its former CEO, did not properly manage the company and that the board conducted an insufficient investigation of the mistakes leading to the EU's fine. The complaint also claims that the Microsoft board responded to her demand for an investigation and action against the responsible parties by stating that there was no evidence that any current or former executives or directors committed any breach of fiduciary duty.

Since the lawsuit, Microsoft again claimed that it investigated this matter and that its officials did not breach their duty. It earlier claimed that the European action resulted from a technical error.

Source: Reuters, "Microsoft sued over browser miscue that led to $731 million EU fine," Bill Rigby, April 11, 2014

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