Microsoft Fined $476 Million
0Overall Score

Microsoft is on track to resolve this month its fight with European Union regulators over its compliance with a 2004 antitrust ruling, the software company’s general counsel said on Wednesday.


Earlier in the day, the European Commission fined Microsoft $476 million for not providing adequate technical documentation to rival server software makers, a stipulation of its antitrust decision against Microsoft in March 2004.

The watchdog also warned that failure to provide acceptable documentation would result in bigger fines in the future.

Microsoft, the world’s largest software maker, said it is encouraged by the feedback from European regulators about the latest batch of technical documents and hopes the issue can be resolved by the end of July.

“Everybody appears to agree that we’re finally on the right track to getting the technical document done,” Brad Smith, Microsoft’s general counsel told Reuters in an interview.

“If we can continue on the path we’ve been on, then we should be in a position to hopefully bring this chapter to a close and hopefully get our relationship with the European Commission back to a more normalized state.”

Based on its optimism about its ability to meet the Commission’s requirements, Smith said Microsoft does not see any need to change how it conducts business in Europe or bring in engineers to alter products it offers in the region.

Smiith said the company has 300 engineers working around the clock to complete the documentation project by July 18 and then field questions and concerns from European regulators

The ruling found that Microsoft had abused its dominant position in the software market, and required the firm to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers.

The Commission said that today’s decision, adopted under Article 24(2) of Regulation 1/2003, finds that Microsoft has still not fulfilled these obligations.

Should Microsoft continue to fail to comply, the Commission warned that it could increase the penalty payment to $4m per day.

“The Commission is obliged to ensure compliance with EU law, and I have always underlined my determination to ensure that Microsoft fully implements the Commission’s March 2004 decision,” said European Competition Commissioner Neelie Kroes.

“I regret that, more than two years after the decision, and despite an order from the President of the Court of First Instance that the Microsoft appeal to the Court does not suspend Microsoft’s obligation to comply, Microsoft has still not put an end to its illegal conduct.”

Given this failure to comply Kroes said that she had no alternative but to levy penalty payments against the software giant.

“No company is above the law, and any business operating in the EU must obey EU law,” she stated.

“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.”

The Commission’s decision of March 2004 requires Microsoft to disclose complete and accurate interoperability information to developers of work group server operating systems.

Following the rejection of Microsoft’s application for suspension of this requirement by the President of the Court of First Instance in December 2004, the Commission expressed concerns to Microsoft that the interoperability information it had provided was not complete and accurate.

Today’s decision concludes that, as of 20 June 2006, Microsoft had still not supplied complete and accurate interoperability information as required by the March 2004 Decision.

“Microsoft’s obligations in this regard are clearly outlined in that decision, in terms of the result to be achieved and what Microsoft must do to achieve that result,” the Commission stated.

“These obligations were specific and have not changed. It is for Microsoft to produce usable documentation.”