EU fines Microsoft €280m in antitrust stand-off

The European Commission slapped Microsoft on Wednesday with a new fine of €280,5-million for failing to fully respect a 2004 antitrust ruling, but the software giant vowed to appeal.

Raising the pressure on Microsoft, the European Union competition watchdog also threatened additional fines of €3-million ($3,82-million) a day from the end of the month if the company continued to defy the ruling.

EU Competition Commissioner Neelie Kroes said that more than two years since the decision was handed down she now had “no alternative” than to impose new fines, on top of a nearly half-billion-euro penalty in the original ruling.

“I sincerely regret that the company has not put an end to its illegal conduct,” Kroes told a news conference.

“The European Commission cannot allow such illegal conduct to continue indefinitely,” she said.

“No company is above the law, each and every company, large or small, operating in the European Union must obey EU law, including competition law for the benefit of all companies and consumers.”

Even while Kroes was still presenting the fine to the press, Microsoft shot back with plans to appeal in court.

Microsoft general counsel Brad Smith said that “we do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission’s original decision and our good-faith efforts over the past two years.

“We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the commission’s unprecedented fine is justified,” he added.

Microsoft already challenged the 2004 ruling in the EU’s second-highest court in April, but the judges are not expected to hand down a decision before the end of the year at the earliest.

A group of Microsoft’s rivals—including technology giants like Adobe, IBM, Oracle and Nokia—welcomed the new fines and urged the commission not to give up.

Their legal counsel Thomas Vinje said: “No competition authority can or should tolerate such a direct challenge to its authority.”

“Microsoft continues to profit in the market from every new day of non-compliance,” he added.

The company has paid dearly for its stand-off with the European Commission, which levied a record fine of €497-million on it in March 2004 for abusing its dominant market power.

After a five-year investigation, Kroes’ predecessor Mario Monti took the commission’s biggest competition decision ever in ruling that Microsoft had broken EU law by using a quasi-monopoly in personal computer operating systems to thwart rivals.

In addition to fining Microsoft, the EU ordered the company to sell a version of its Windows operating system without Media Player software and to divulge information on Windows needed by makers of rival products.

Although Microsoft has paid the fine, it has fought tooth-and-nail over the information it is supposed to reveal to competitors.

Microsoft says that it is releasing reams of key computer code needed by programmers of rival products and claims the commission was too vague in defining exactly how it must comply with the 2004 ruling.

“The record will show that Microsoft has acted in good faith to comply with the Commission’s decision,” Smith said.

“We delivered thousands of pages of technical documents from December 2004 onward,” he added.

Smith said Microsoft had offered to change its planned successor to its Windows operating system, known as Vista, to avoid future competition problems.

Kroes acknowledged that Microsoft had made progress in recent weeks to release the information needed by rivals although it still had to be reviewed by an independent trustee monitoring the process.

“We have to wait for the final result, but anyhow from June 20th, over the last three weeks, they did an extremely good job,” Kroes said.

“My only remark is why wait that long and why not do that earlier?” - AFP

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