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June 26, 2006

EU to impose Microsoft fines?

Posted by David Hunter at 12:38 PM ET.

When we last visited the EU’s European Commission and their plan to fine Microsoft up to €2 million a day, Microsoft was touting an April hearing as a “breakthrough” because they claimed they finally found out what documentation would satisfy EC complaints. Meanwhile, earlier this month EC competition honcho Neelie Kroes was entertaining the crowd with her crusty schoolmarm bit:

Today the EC’s competition commissioner Neelie Kroes again reminded the software giant that the daily penalty would be imposed – and backdated to December – if Microsoft didn’t supply adequate documentation.

“They should fill in their homework,” said Kroes, before the summer break.

“They had a time-out in filling in their homework, but that doesn’t mean there’s a time out for fines,” she said.

Well, according to Matthew Newman at Bloomberg News, it now looks like the EC is planning a sharp rap on Microsoft’s knuckles:

European regulators are recommending Microsoft Corp. be fined as much as 2 million euros ($2.5 million) for each day that it failed to disclose information on Windows to competitors, said four people familiar with the draft ruling.

The European Commission in Brussels told national competition authorities last week that Microsoft hadn’t provided sufficient information to competitors on the inner workings of the operating system, as required under a March 2004 ruling, said the people, who declined to be identified because the decision isn’t public.

Representatives of the 25-member European Union will meet July 3 to discuss the draft decision and again on July 10 to decide how much to fine Microsoft, the people said.

“The commission’s saying that they’re not accepting that Microsoft is getting away with this,” Neil Macehiter, a partner at Macehiter Ward-Dutton of Cambridge, England, said in a telephone interview. “They want to show that they’re taking action.”

“Microsoft has complied fully with every instruction given by the commission,” the company said in an e-mailed statement. “Any fine would be unjustified and unnecessary.”

“Microsoft has committed massive resources to the technical documentation program following the guidance provided by the trustee in April of this year, and has already delivered five of seven installments of technical documentation developed to the agreed specification and according to the agreed work plan,” Microsoft’s statement said. “The next two installments will be submitted on June 30 and July 18 and Microsoft is working hard to also meet those deadlines.”

Note that this is separate from Microsoft’s April proceeding before the European Court of First Instance which, if completely successful, would invalidate all of the EC’s decisions including the fine.

Update: From Tobias Buck in Tuesday’s Financial Times:

According to several people familiar with the EU case, the European Commission’s antitrust directorate has drafted a ruling stating that Microsoft has failed properly to implement the EU’s antitrust decision of March 2004. Brussels, which has been battling with the group for almost seven years, believes this constitutes a fresh violation by Microsoft.

The draft ruling will be presented next Monday to national competition authorities, which must be consulted before every important decision by the regulator. Neelie Kroes, the EU competition commissioner, intends to deliver the ruling on July 12, people familiar with the case said.

Although Ms Kroes will need the backing of her fellow commissioners for a formal ruling and a fine against Microsoft, it is rare for draft decisions to be overturned at this stage.

Action against Microsoft would represent the first time the Commission has punished a company for failing to comply with one of its rulings.

Filed under Antitrust, General Business, Governmental Relations, Legal, Microsoft

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5 Responses to “EU to impose Microsoft fines?”

  1. EU, Korean antitrust regulators ganging up on Microsoft? -- Microsoft News Tracker Says:

    [...] Late yesterday, I updated a post about what appears to be a near certainty that the European Commission will decide to fine Microsoft with some further information from this morning’s Financial Times. Predictably, there has been an outpouring of news stories on the subject, but I found one of them from Kelly Olsen at the AP particularly interesting – EU, South Korean Competition Regulators Vow to Step Up Cooperation to Fight Cartels, Abuses: The chief competition regulators for the European Union and South Korea vowed Tuesday to step up cooperation to fight cartels and abuses of market dominance, saying they have much to learn from each other. [...]

  2. EU antitrust regulators grab a bigger stick -- Microsoft News Tracker Says:

    [...] Repeat offenders will also face higher fines than in the past. Until now, the Commission has increased fines by 50 percent but now it will be able to charge as much as 100 percent more. I guess they need some walking around money. None of this is directly applicable to the fines on Microsoft that are likely coming in July, but now we know what to look forward to if and when the European Commission goes after Microsoft again. Filed under Legal, Governmental Relations, General Business, Antitrust, Microsoft   [Permalink] [...]

  3. The EU and Microsoft: a pox on both their houses -- Microsoft News Tracker Says:

    [...] The pernicious unelected bureaucrats of the European Union really ought to look into using Competition Commissioner Neelie Kroes as their pin-up girl. When she isn’t coming on as a scolding schoolmarm, she runs an interminable process that makes a sieve look tight with her as the head blabbermouth: The European Union’s Competition Commissioner Neelie Kroes said on Thursday she could see no way around fining U.S. software giant Microsoft for breaching the bloc’s antitrust rules. [...]

  4. Microsoft hands in late homework, hopes to avoid more EU detention -- Microsoft News Tracker Says:

    [...] Pardon the school analogy, but it’s European Commission competition honcho Neelie Kroes’ favorite, so who am I to quibble? Anyhow, Microsoft has finally completed and handed over the server protocol interoperability documentation that the European Commission had demanded: Microsoft Corp. has submitted documents required by the European Commission in an effort to avoid further fines for breaching an antitrust ruling, the European Union regulator said on Monday. [...]

  5. More Microsoft server announcements from IT Forum -- Microsoft News Tracker Says:

    [...] Maybe it’s an extra credit assignment from Neelie Kroes? [...]

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