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Microsoft lands €280.5m fine from EC
And gets ready to fight

By Jo Best

Published: Wednesday 12 July 2006

The EC has slapped Microsoft with a €280.5m fine for not complying with an antitrust judgement against it.

Competition commissioner Neelie Kroes announced the fine today, saying Microsoft had not met earlier sanctions imposed by the EC - which demanded the software giant must make information available to rivals by December last year to enable their work group servers to interoperate with Microsoft PCs and servers.

The fine covers the period from that time until 20 June at a rate of €1.5m per day - although the amount is short of the maximum penalty of €2m it could have imposed. If Microsoft does not comply with the antitrust judgement by the end of the month the fine will be raised to €3m per day.

Following the initial judgement, handed down in March 2004, Microsoft was warned by the EC that if it did not produce the required documentation, it would face daily fines. While Microsoft insists it has tried to meet the terms of the settlement, the EC says it has not supplied "complete and accurate" information necessary to permit interoperability.

The EC's Kroes said she hoped Microsoft will mend its antitrust ways. "Microsoft has still not put an end to its illegal conduct... No company is above the law. Any businesses operating in the EU must obey EU law. I sincerely hope that the latest technical documentation being delivered by Microsoft will finally bring them into compliance and that further penalty payments will not prove necessary," she said in a statement.

Today's fine comes on top of a record penalty imposed by the EU on Microsoft in May 2004. Then, the Redmond giant was found guilty of abusing its market dominance by bundling its media player software with its operating system and was hit it with a landmark €497m charge.

Microsoft has announced it will appeal the decision, blaming the Commission's lack of clarity for stopping it meeting the deadline.

Brad Smith, general counsel at Microsoft, said the EC had not supplied "specific and concrete" details about how the interoperability documentation should be written.

He added: "We don't believe that any fine - let alone a fine of this magnitude - is appropriate... I'm hopeful we can bring this chapter to a close in a couple of weeks."