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EU threatens Microsoft with penalties
(AP)
Updated: 2005-12-23 08:53
The European Union on Thursday threatened to fine Microsoft Corp. up to 2
million euros ($2.37 million) a day for failing to obey its 2004 antitrust
ruling, accusing the company of intransigence in sharing information with
competitors.
"I have given Microsoft every opportunity to comply with its obligations.
However, I have been left with no alternative other than to proceed via the
formal route to ensure Microsoft's compliance," said EU Antitrust Commissioner
Neelie Kroes.
The threat of new sanctions against Microsoft aims to force it to provide
more detailed information so competitors' products can be made more compatible
with Microsoft's Windows server operating system.
It follows an independent computer scientist's scathing assessment of what
Microsoft has thus far provided, and set off a new round of bickering between
the software company and regulators.
Brad Smith, Microsoft's top lawyer, accused the EU Commission of threatening
the fine before it had even reviewed highly technical documentation he said
Microsoft sent to European officials on Wednesday.
"We don't understand how they can reach these conclusions because they
haven't read or reviewed these documents," Smith said.
He also expressed frustration with the EU's repeated requests for
information.
"Every time we do absolutely everything we've been asked to do, we're told
that there's something else we need to do," Smith said in an interview with The
Associated Press.
EU spokesman Jonathan Todd said the EU had not yet received copies of the
documents that Microsoft said it sent.
But he expressed little hope they would address some of the EU's major
concerns. The last Microsoft letter did little more than promise that the
company would correct Web links and other formatting errors, said Todd.
The European Commission takes its Christmas vacation on Friday so the delay,
in effect, forces the EU to wait until the second week of January before it can
assess any changes.
The EU's decision was based on a trustee's finding that Microsoft's
compliance with the 2004 ruling was insufficient.
"Any programmer or programming team seeking to use the technical
documentation for a real development exercise would be wholly and completely
unable to proceed on the basis of the documentation. The technical documentation
is therefore totally unfit at this stage for its intended purpose," the trustee,
British computer scientist Neil Barrett, said in a report.
"The documentation appears to be fundamentally flawed in its conception, and
in its level of explanation and detail. ... Overall, the process of using the
documentation is an absolutely frustrating, time-consuming and ultimately
fruitless task. The documentation needs quite drastic overhaul before it could
be considered workable."
Smith said the EU was now demanding more than regulators originally said they
would require, forcing the company to provide technical documentation that could
allow a competitor to clone its valuable Windows server software.
Todd said Microsoft was wrong to claim the EU has been moving beyond the
terms of its original antitrust order.
"The goalposts have not moved... We are not making new and changing demands,"
he said. "We simply request that Microsoft comply with what is in the March 2004
decision... Nothing more, nothing less."
The EU said it was also investigating the royalties Microsoft would charge
for using its software information and said another legal challenge might be
issued if it was unhappy with the financial demands.
To back its claim, the EU Commission on Thursday issued a formal "statement
of objections," a measure that could lead to the hefty daily penalties that
would be backdated to a Dec. 15 deadline to provide more information.
In March 2004, the EU ordered Microsoft to pay 497 million euros ($613
million), share server software blueprints with rivals and offer an unbundled
version of Windows without the Media Player software for what it saw as an abuse
of its dominant position in the industry.
The Court of First Instance, the EU's second-highest court, has not yet set a
date to hear Microsoft's appeal.
Microsoft now has five weeks to react to Thursday's statement of objections
and may have an oral hearing with antitrust authorities.
Microsoft shares fell 14 cents to close at $26.59 Thursday on the Nasdaq
Stock Market.
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