Microsoft Lashes Out at EU over Fine Threat

By Peter Galli  |  Posted 2005-12-22 Print this article Print

Microsoft has five weeks to respond to the Commission's statement of objections, after which the Commission, after consulting with advisory committees, will then make a decision whether to impose the fine of up to $2.37 million a day on Microsoft.

The European Commission, the executive body of the European Union, has again rapped Microsoft Corp. over the knuckles, this time warning the Redmond-based software maker that it could face a retroactive fine of up to $2.37 million a day for failing to comply with its antitrust order. The fine, if levied, will start on Dec. 15 and continue until a final decision is made in the case, the Commission said Thursday. The move follows a March Commission order that Microsoft disclose complete and accurate interface documentation to work group server competitors that allows them full interoperability with Windows PCs and servers.
The Commission also hired a trustee to monitor Microsofts compliance and set Dec. 15 as the deadline for Microsoft to meet the conditions of that order, which the Commission says it appears not to have done.
Click here to read more about the Commissions appointment of a British cybercrime expert to assist in overseeing Microsofts compliance. "The Statement of Objections indicates that the Commissions preliminary view, supported by two reports from the Monitoring Trustee, is that Microsoft has not yet provided complete and accurate specifications for this interoperability information," the Commission said Thursday. Microsoft has five weeks to respond to the Commissions statement of objections, after which the Commission, after consulting with the advisory committees of member state competition authorities, will then make a decision whether to impose the fine of up to $2.37 million a day on Microsoft. "I have given Microsoft every opportunity to comply with its obligations. However, I have been left with no alternative other than to proceed via the formal route to ensure Microsofts compliance," Neelie Kroes, the European competition commissioner, said in a statement. But Microsoft fired right back at the Commission, saying that it planned to contest the Commissions statement of objections "to the full extent permitted under EU law, including a full oral hearing." It also vigorously defended itself and its actions, saying the Commissions Statement of Objections was unjustified and referred to technical documentation it had already submitted, saying neither the Commission nor the Trustee had read or reviewed these new documents. Microsoft had revised the technical documents last week at the Commissions request, responding to new feedback raised with it just six days prior. "In the interest of due process, we think it would have been reasonable for the Commission and the Trustee at least to read and review these new documents before criticizing them as being insufficient," Brad Smith, Microsofts General Counsel, said in a statement. "We have now responded to more than 100 requests from the Commission. We continue working quickly to meet the Commissions new and changing demands. Yet every time we make a change, we find that the Commission moves the goal post and demands another change," Smith said. He then went on to list how Microsoft was fully committed to, and had worked to comply with, the Decision. It had shipped a new version of Windows, paid a historic fine, and provided unprecedented access to Microsoft technology to promote interoperability with other industry players. Read more here about how many major European PC makers and retailers say they have no plans to carry Microsofts Media Player-free version of Windows. But, of particular concern to Microsoft was the Commissions latest demand that the internal workings of Windows be documented and licensed, which could open the door to the production of clones of parts of the Windows operating system, he said. During the Sept. 3, 2004, hearing with President Vesterdorf, the Commission clearly stated this was not within the scope of its decision, "yet the Commission confuses disclosure of the source code with disclosure of the internals and insists that it will fine the company if it fails to address this. We will continue to take new steps to address each new demand from the Commission, in order to ensure our compliance with the Commissions March 2004 decision in a timely manner," Smith said. Check out eWEEK.coms for Microsoft and Windows news, views and analysis.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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