EU regulator threatens to impose daily fines on Microsoft for non-compliance of court ruling

EU regulator threatens to impose daily fines on Microsoft for non-compliance of court ruling

	Published : Sat, 24 Dec 2005 02:50 By : Paula Demarzio Print this Story

BRUSSELS: The European Commission has threatened to impose daily fines on U.S. software major Microsoft Corporation for failing to comply with the antitrust sanctions it had imposed a year ago, which a European Union Court had directed it to obey.

The commission said it could fine the company up to 2 million euros a day until it abides by the directive of the commission to provide Windows software code-related information to rivals.

EU's competition commissioner Neelie Kroes said the company was given every chance to comply with the obligations. "However, I have been left with no alternative other than to proceed via the formal route to ensure Microsoft's compliance."

Microsoft has time until 25 January 2006 to reply and show that it had complied with the directive. The fine will be with retrospective effect from 15 December, the commission said.

Microsoft described the action as unjustified, saying it has been doing its best to obey the regulator's March 2004 order, but the commission has been adding new demands ever since. It said it will fight the latest directive to the extent permitted by EU laws.

The commission had in its March 2004 ruling said Microsoft had misused its monopoly position in the market for PC operating systems and media players and imposed a record 497 million-euro fine on the company. It also directed the company to sell a version of its Windows software without the Media Player software in order to give rivals a level playing field and disclose complete and accurate interface documentation that would allow interoperability between non-Microsoft work group servers and PCs and servers using Windows OS.

Microsoft had appealed in the Court of First Instance, which is the EU's second-highest court, seeking suspension of the order. The court had rejected the appeal and warned that non-compliance could attract daily fine. It had set the target date for compliance as 15 December. The company's appeal against the full EU order is pending before the court, which is expected to hold hearings in early spring.

Microsoft had, after negotiations, started offering earlier this year, a version of its desktop operating system, called Windows XP N, without the Media Player software.

The company claimed the latest demand can lead to creation of clones of parts of the Windows OS and it went beyond the scope of the original decision.

The commission in its directive today quoted two reports from a monitoring trustee appointed by mutual consent that the company had not yet provided full specifications. It quoted the monitoring trustee, British professor Neil Barret, as having said that "any programmer or programming team seeking to use the Technical Documentation for a real development exercise would be wholly and completely unable to proceed on the basis of the documentation.

"Overall, the process of using the documentation is an absolutely frustrating, time-consuming and ultimately fruitless task."

Microsoft has challenged this contention saying the commission and the trustee had failed to take the proposals it made last week fully into account before taking the action. Details of the proposal were not available.

Meanwhile, the commission has said it will investigate the royalties Microsoft will charge for using its software information. If found violating the rules, it may issue another legal challenge.

Microsoft had settled an antitrust claim in the U.S. in 2001, which required the company to share information with competitors. But, experts say this did not restrain the company nor did it pave way to foster competition.

The European Commission has made more stringent provisions ensuring that the data-serving software made by Microsoft's rivals can work as easily with Microsoft's desktop operating system as Microsoft's server software does.