The European Commission is threatening to fine Microsoft 5% of its global revenue for failing to comply with the sanctions imposed last year in a landmark antitrust ruling, it emerged on Friday.
Relations between the European Union’s competition authorities — which fined the software group a record â,¬497-million — and Microsoft have sunk to a new low, even though the company said two months ago it would comply with court rulings that it implements EU ”remedies” forthwith.
In December, Microsoft lost its appeal at the Court of First Instance, the EU’s second-highest court, against the twin interim sanctions imposed by Brussels and set itself a six-week deadline for complying.
It has already posted details of its secret protocols enabling rival software companies to offer servers that are inter-operable with its Windows operating system, but is now in dispute with the commission over the licence fees or royalties competitors should pay.
Another row has broken out over the name it proposes giving to the version of Windows without the MediaPlayer audiovisual programme that it is making available to PC manufacturers — which was due to be on sale in European outlets this month.
The EU’s competition authorities, headed by Neelie Kroes, the Dutch commissioner, have rejected out of hand Microsoft’s initial suggestion of calling the ”degraded” version of its operating system the ”Windows reduced-media edition” — viewed as a serious deterrent to consumers. Other proposed names have also been rejected.
On Friday, the commission confirmed that it is consulting retailers and rival manufacturers, including RealNetworks and Samba, the open-source operator, about Microsoft’s steps to comply with the twin sanctions. These are due to be completed by the end of next week.
If negotiations break down, Brussels could impose new fines of 5% a day of Microsoft’s daily global revenues. The software group, which expects annual sales of about $40-billion this year, said last month it had made record revenues of $10,8-billion in the final quarter of 2004.
A commission spokesperson said: ”We will decide whether we consider the proposals from Microsoft are satisfactory or not in the light of reactions in the market place.” A decision could come as early as next month.
Privately, officials are angry at what are seen as Microsoft’s underhand, prevaricating efforts to lessen the impact of the sanctions.
The software group, however, insisted: ”We are fully committed to implementation of the commission’s and the court’s decisions.” — Guardian Unlimited Â