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EU: EU hits Microsoft with 280.5m antitrust fine

by Mark TranGuardian Unlimited
July 12th, 2006

The rift between the European commission and Microsoft today widened as the software giant was fined 280.5m (193.7m) for defying an antitrust ruling.

The commission also threatened new penalties of 3m a day, beginning on July 31.

EU officials said the new penalties would take effect unless Microsoft supplied complete and accurate technical information to rival companies, enabling them to develop software to make their equipment compatible with the Windows operating system.

"I regret that, more than two years after the decision ... Microsoft has still not put an end to its illegal conduct," the EU competition commissioner, Neelie Kroes, said.

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"I have no alternative but to levy penalty payments for this continued compliance. No company is above the law."

Today's sanction comes on top of the record 497m fine levied on the world's biggest software group in March 2004.

At that time, the commission ordered Microsoft to ensure interoperability with rival servers by making secret protocols available and delivering a version of Windows without its MediaPlayer audiovisual software.

Microsoft said it would appeal against today's fine, and its general counsel, Brad Smith, said it would ask the courts whether the "unprecedented" fine was justified.

"We have great respect for the commission and this process, but 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," he said.

"We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the commission's unprecedented fine is justified."

Microsoft has offered to make the secret codes behind Windows available to software developers.

The company insists it is working flat out to ensure that inter-operability information is available to rivals, for a fee yet to be agreed and without putting at risk its intellectual property rights.

"The record will show that Microsoft has acted in good faith to comply with the commission's decision," the company said in a statement.

"We delivered thousands of pages of technical documents from December 2004 onwards. When it became clear there were disagreements over the technical documentation requirements, we pressed for greater clarity."

Microsoft has also appealed against the 2004 ruling by Mario Monti, Ms Kroes' predecessor. The court of first instance, Europe's second-highest court, is due to deliver its verdict later this year or early next after hearing the case in March.

The software giant earned $2.9bn (1.5bn) in the quarter ended March 31 on revenues of $10.9bn.

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