Micrsoft to be Fined European Regulators Vote Indicates

By AP Posted 05 July 2006 @ 11:19 am EET     Print     Reprint     E-Mail     Comments

BRUSSELS (AP) - In a major step toward new penalties against Microsoft Corp. (MSFT), Europe's antitrust regulators voted unanimously Monday in favor of fining the world's largest software company for flouting a 2004 ruling, two people close to the case said.

The regulators backed European Union plans to penalize the company but did not discuss the amount of the fine — which they will do at another meeting next week, according to the sources who spoke on condition of anonymity because no formal decision has been reached.

The European Commission threatened in December to levy daily fines of up to 2 million euros ($2.5 million) against Microsoft for not complying with an order to supply rivals with "complete and accurate" information to help them develop software that works smoothly with Microsoft's Windows operating system.

Under the rules, the commission must consult regulators twice — once on the principle of the ruling and on the amount — before it announces the fine. Regulators agreed on the principle Monday.

The commission declined to comment on Monday's meeting. Microsoft said it was working to meet deadlines to fix problems with the technical information it is compiling so that rivals can better work with its ubiquitous operating system.


Microsoft said it has a team of 300 people working full-time on a framework to supply the information. Six of seven installments have already been delivered, it said.

Late last year, independent trustee Neil Barrett, a computer science professor, reported that 12,000 pages needed a drastic overhaul to make them workable.

"Microsoft is dedicating massive resources to meet the aggressive schedule and high-quality standards set by the trustee and the commission in this process," the Redmond, Wash.-based company said in a statement. "Our engineers are working around the clock to meet the seventh and final delivery date for this project scheduled for July 18."

Microsoft has said any fine at this stage would be "unjustified and unnecessary" while it was still working to comply with the ruling.

But the commission said a decision to levy fines was not connected with this project and Microsoft had already had 18 months to comply after a court rejected its appeal against immediate sanctions.

Last week, the Financial Times reported that the EU would make a final decision to fine Microsoft on July 12 — which could see Microsoft faced with a maximum 418 million euro ($525 million) penalty. The commission refused to confirm this date.The EU has never before fined a company for failing to obey an earlier order.

In December 2004, Microsoft lost a legal bid to stop antitrust sanctions while it was appealing the ruling that obliged it to share communications code with rivals, offer a version of Windows without Media Player software and pay a record 497 million euro ($613 million) fine.

The EU's second-highest court heard its appeal in April and must still deliver its verdict. Its judgment can be appealed to the European Court of Justice.