Microsoft fined $473m for it' s continued abuse of power

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The European Commission has slapped Microsoft with a new fine of $473 million for failing to fully respect a 2004 antitrust ruling that found it abused its dominant market power.

The European Union competition watchdog has also warned that the US software giant faced additional fines of $5 million (3 million euros) a day as of the end of the month if the company continues to defy the ruling.

Microsoft has announced it will appeal against the new fine.

EU Competition Commissioner Neelie Kroes said that more than two years since the decision was handed down she now had " no alternative" than to impose new fines, on top of an $839 million penalty in the original ruling in March 2004.

" No company is above the law. Any businesses operating in the EU must obey EU law," she said.

The new fine was calculated on the basis of $2.5 million a day, backdated to December 15, the day that Brussels stopped the clocks for Microsoft to comply.
After a five-year investigation, Ms Kroes' predecessor Mario Monti took the commission' s biggest competition decision ever in ruling that Microsoft had broken EU law by using a quasi-monopoly in personal computer operating systems to thwart rivals.

In addition to fining Microsoft, the EU ordered the company to sell a version of its Windows operating system without Media Player software and to divulge information on Windows needed by makers of rival products.

Although Microsoft has paid the fine, it has fought tooth-and-nail over the information it is supposed to reveal to competitors.

Microsoft says that it is releasing reams of key computer code needed by programmers of rival products and claims that further fines are unfair.

Microsoft also argues that if it is not complying with the decision it is because the commission was too vague in the 2004 ruling about what the company needed to do.

Microsoft general counsel Brad Smith said: " We do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission' s original decision and our good-faith efforts over the past two years.

" We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the Commission' s unprecedented fine is justified."

Bloomberg.com

Microsoft Fined EU280.5 Million in EU Antitrust Case (Update2)
July 12 (Bloomberg) -- European regulators fined Microsoft Corp. an additional 280.5 million euros ($357 million) for antitrust violations, saying the world' s largest software maker flouted an order to scale back its Windows monopoly.

The European Commission, the European Union' s antitrust authority in Brussels, said Microsoft hasn' t complied with a 2004 order to license information to rivals on how Windows communicates over a network. The regulator threatened to double daily fines against the company if it continues to resist the ruling. Microsoft said it will appeal.

``No company is above the law,' ' European Competition Commissioner Neelie Kroes said in a briefing today in Brussels. ``It is to give a clear signal to Microsoft that they have to deliver, that they have to stop their abuse.' '

The penalty against Microsoft, whose software runs on about 95 percent of the world' s personal computers, comes on top of a 497 million-euro fine levied by Mario Monti, the competition commissioner at the time. He also ordered the Redmond, Washington- based company to sell a version of Windows without a video and music player. Microsoft is appealing Monti' s ruling to the European Court of First Instance in Luxembourg.

New Daily Penalties

Today' s fine, the first by the commission for failure to comply with an antitrust order, was 1.5 million euros a day, levied between Dec. 15 and June 20. That' s less than 2 million euros in daily fines that the commission threatened to levy in December. The regulator said it would fine Microsoft an additional 3 million euros a day if the company continues not to comply with the ruling.

Microsoft shares traded in Germany fell to $22.93 as of 12:24 p.m. in Frankfurt, down from their closing price yesterday of $23.10 in Nasdaq Stock Market composite trading in New York. The stock has shed 5.4 percent of its value since the March 24, 2004, EU antitrust decision. The Standard & Poor' s 500 index has gained 17 percent in the same period.

The 2004 ruling, detailed in a 302-page report, came 2 1/2 years after Microsoft reached a settlement with the U.S. Justice Department. That decision forced the company to allow PC makers to install rival software programs and also ordered Microsoft to release technical information.

``If the commission wants to enforce its decision, they have to fine them,' ' Kurt Haegeman, an antitrust lawyer at Baker & McKenzie in Brussels, said in a phone interview before today' s ruling. ``Otherwise, they lose credibility.' '

Court Review

The company' s top lawyer, Brad Smith, said Microsoft has already released complete data on Windows. The company, which has complained that the EU is making escalating and unclear demands, plans to appeal today' s decision to levy additional fines, he said.

``We do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the commission' s original decision and our good-faith efforts over the past two years,' ' Smith said in a statement. ``We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the commission' s unprecedented fine is justified.' '

The company is ``totally committed' ' to complying with the antitrust order and is working to deliver the final pieces of information, Smith said.

``What they are doing now is indeed constructive,' ' Kroes said. Still, ``we are not yet there.' '