handled an error with its Internet Explorer browser
that ended up costing the company a record-
breaking $731 million fine by European anti trust
regulators.
The lawsuit, brought by shareholder Kim Barovic in
federal court in Seattle on Friday, charges that
directors and executives, including founder Bill
Gates and former Chief Executive Officer Steve
Ballmer, failed to manage the company properly and
that the board's investigation was insufficient into how the miscue occurred.
humiliating episode for Microsoft, which the software
company has never fully explained and has
accounted for only as a "technical error. "
In March last year, the European Union levied its
largest ever antitrust fine against Microsoft for
breaking a legally binding commitment made in
2009 to ensure that consumers in Europe had a
choice of how they access the internet, rather than
defaulting to Microsoft's Internet Explorer browser.
Its investigation found that updated software issued
between May 2011 and July 2012 meant that 15
million users were not given a choice.
It was the first time the European Commission, the
EU's antitrust authority, handed down a fine to a
company for failing to meet its obligations.
In her lawsuit, Barovic says she asked Microsoft's
board to fully investigate how that mistake occurred
and to take action against any directors or
executives that had not performed their duties.
She says Microsoft replied that it found no evidence
of a breach of fiduciary duty by any current or
former executives or directors.
In a statement on Friday, Microsoft repeated that
stance. "Ms.
Barovic asked the board to investigate her demand
and bring a lawsuit against the board and company
executives," said an emailed statement from
Microsoft.
"The board thoroughly considered her demand as
she requested and found no basis for such a suit. "
The problem on European computers prevented
the so-called "ballot" screen from appearing.
Sources close to the company have said it was
connected to updated Windows 7 software.
Ballmer, who was CEO at the time, and Steven
Sinofsky, then the head of the Windows unit, both
had their bonuses cut in 2012 after the error came to
light.
The case is Barovic v Ballmer et al in U.
S.
District Court, Western District of Washington, No.
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