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EU issues warning over Microsoft's disobedience

Microsoft Corp's refusal to obey a 2004 order that it share software data with rivals may prompt European authorities to consider harsher remedies in future antitrust cases, Europe's chief competition enforcer told US lawyers.

The lengthy legal fight with Microsoft has taught officials that more drastic remedies such as a breakup may be needed for companies that continue to abuse their market dominance, Neelie Kroes, the European Commission's competition commissioner, told a conference in Washington on Friday.

Microsoft is appealing a 497 million euro (US$675 million) fine levied in 2004 for abusing its Windows monopoly for personal computer operating software by squelching competition for computer servers. Last month, European regulators threatened Microsoft with fines for charging "unreasonable" licensing fees for data needed by software rivals.

"We have never, ever before encountered a company that has refused to comply with commission decisions," Kroes said. "We learned we may have to look for a more effective remedy."

Kroes was speaking at a panel discussion with US antitrust enforcers, who have said the commission's actions against Microsoft were based on faulty economic principles. The discussion was sponsored by the American Bar Association.

"We have done everything humanly possible to comply with a decision that is unfortunately very unclear and undefined, and we will continue to work with the commission in every way that we can," Microsoft spokesman Guy Esnouf said in an e-mailed statement.

In 2001, the US Justice Department negotiated a settlement with Microsoft after an appeals court upheld findings that the world's largest software maker had illegally protected its Windows monopoly.

The appeals court also overturned a trial judge's order breaking up Microsoft.

Subsequently, the European Commission, acting on complaints by Sun Microsystems Inc, America Online Inc, now part of Time Warner Inc, and other US companies, ordered Microsoft to share software data that rivals need to write server programs that work well with the Windows PC operating system.

The commission, the EU's antitrust arm in Brussels, began investigating Microsoft following a complaint filed by Sun in 1998. Last July, the agency fined Redmond, Washington-based Microsoft 280.5 million euros for not complying with the March 2004 ruling.

Kroes said the EU won't shrink from examining allegations against US companies that do business in Europe and are accused by other American companies of anti-competitive behavior.
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