Microsoft Lashes Out at EU over Fine Threat

 
 
By Peter Galli  |  Posted 2005-12-22
 
 
 
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.

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