Was Microsoft’s Fine Too Little?

The European Commission passed its fine for Microsoft (NASDAQ:MSFT) Wednesday morning in Amsterdam, but it may have made a mistake.

After a complaint from Opera Software, the make of the Opera web-browser, in 2009, the European Commission forced Microsoft to offer options for users to install various browsers when they set up their computers. But Microsoft broke this deal in nearly 15 million instances, when the Windows 7 Service Pack 1 software did not offer users a prompt to install browsers other than Microsoft’s own Internet Explorer.

When the European Commission addressed Microsoft over the problem, the Windows maker apologized and said that the problem was a glitch due to the oversight of an engineering team. The software maker then helped the Commission conduct its investigation.

The Commission could have fined Microsoft nearly $9 billion dollars if it had employed the maximum penalty, which would have been 10 percent of the company’s revenue during the time it was breaking the agreement. Instead, the Commission, under the leadership of Joaquin Almunia, went with a quick settlement.

The fine Microsoft was given was only 561 million euros, or about $733 million. This pales in comparison the the potential $9 billion fine the Commission could have doled out, and the worry is that it may have made a significant mistake…