EC hits Microsoft with US$353M fine

The computing giant has been handed a substantial fine for failing to comply with the 2004 European antitrust ruling, but still protests its innocence.

The European Commission (EC) has fined Microsoft 280.5 million euros (US$352.5 million) for failing to comply with the 2004 antitrust ruling against it.

In an announcement on Wednesday morning, the EC said it would fine Microsoft 1.5 million euros (US$1.89 million) a day, backdated to Dec. 16, 2005.

"The fine is at a substantial level to induce Microsoft to comply. They have to behave," said Competition Commissioner Neelie Kroes at a press conference.

She added that this is the first time the EC has had to fine a company for failure to comply with an antitrust decision.

The Commission had previously said it would fine Microsoft up to 2 million euros (US$2.5 million) a day if it judged it had not satisfied the terms of the antitrust ruling. In 2004, the Commission had ruled that Microsoft shut out rivals by withholding information that would help them make server software as compatible as Microsoft's own with its ubiquitous Windows operating system.

It demanded that Microsoft provide that information, and has now judged that the company has still not done so.

Kroes also said that the fine would be raised to 3 million euros (US$3.8 million) per day from Jul. 19 if Microsoft continued to drag its feet.

"They have to provide complete and accurate specifications. If the latest documentation is not complied with, we will have to consider raising the level of the fines," said Kroes. "Microsoft has not even come close to providing adequate provision of their specifications."

Microsoft, though, denies failing to comply with the EC's demands.

"We have great respect for the Commission and this process, but 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," said Microsoft general counsel Brad Smith. "We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the Commission's unprecedented fine is justified.

"Despite these fines, Microsoft remains totally committed to full compliance with the Commission's 2004 decision. We will continue to do whatever the Commission asks to comply with its decision as these issues are considered by the courts," Smith added.