EU Threatens Microsoft With Daily Fines For Non-Compliance

A standoff between the EU antitrust watchdog and Microsoft heated up Thursday when the European Commission threatened to slap a daily fine of up to 2 million euros ($2.37 million) on US software giant for failing to comply with a ruling.

As the case rumbles on, it is increasingly testing not only the patience of EU regulators but their authority.

The European Union's executive, which polices cross-border competition issues in the EU, said the group would now have five weeks to implement the measures if it wished to avoid the fine.

The commission had given Microsoft until Dec.15 to disclose key information that would allow inter-operability with some of its software "on reasonable terms."

Microsoft leaves Kroes with "no alternative"

"I have given Microsoft every opportunity to comply with its obligations," said competition commissioner Neelie Kroes in a statement. "However, I have been left with no alternative other than to proceed via the formal route to ensure Microsoft's compliance," she added.

The US company said the commission's criticism were "unjustified" because it had submitted on time new documents it claimed that EU regulators and an independent trustee advising on

the case had not even read.

"We are fully committed to comply with the decision," Microsoft general counsel Brad Smith in a statement.

"We've shipped a new version of Windows, we've paid an historic fine, and we've provided unprecedented access to Microsoft technology to promote inter-operability with other industry players," he added.

Tech giant massively fined for abusing its position

The EU competition watchdog already fined the software group in March 2004 a record 497 million euros for abusing its dominant market position.

It also called on Microsoft to market a version of its Windows operating system without bundling it with its software Media Player and to divulge information about its operating system needed by manufacturers of competing products.

The EU's second-highest court gave its backing in December 2004 to the commission order to implement remedies, which Microsoft wanted suspended.

"It is now one year since the Court of First Instance confirmed that Microsoft had to comply with the remedies imposed by the March 2004 decision," the commission spokesman for competition, Jonathan Todd, told journalists. "The commission very much regrets that one year on Microsoft has still failed to do so," he added.

The case continues to drag on as the commission looks into "informal complaints" against the group.

Further non-compliance could lead to higher daily fines

If Microsoft remains defiant, the commission could decide to increase the daily fine.

"We would have preferred obviously that Microsoft complied quickly as they indicated this time last year that they would," Todd said. "I would like to stress that we expect of course Microsoft to comply with the March 2004 decision and not with their own interpretation of the March 2004 decision."

But Microsoft insisted it had done everything to satisfy the commission, which accused of making inconsistent demands.

"We continue working quickly to meet the commission's new and changing demands," Smith said. "Yet every time we make a change, we find that the commission moves the goal post and demands another change."