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Sat, Dec 24, 2005 - Page 12 News List

EU threatens Microsoft with stiff fines

PUNISHMENT The computer giant may have to pay up to US$2.36 million every day for defying last year's antitrust ruling and failing to share data with its competitors

AP , BRUSSELS

The EU has threatened to fine Microsoft Corp up to US$2.36 million a day for failing to obey last year's antitrust ruling, saying the software giant was proving intransigent about sharing data with competitors.

Microsoft retorted that the EU Commission was trying to undermine its Windows operating system with ever-more-drastic demands for technological transparency, and that it would contest the measure under EU law.

The EU head office took new legal steps against Microsoft on Thursday aimed at forcing Microsoft to provide better documentation so its software programs can be used with competitors' products. Microsoft has until Jan. 25 to answer the complaint.

"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," EU antitrust commissioner Neelie Kroes said.

Microsoft said, however, that the commission's latest demands on opening up its software specifications would also open the door to the cloning of the company's core product, the ubiquitous Windows operating system.

On top of that, Microsoft retorted that the EU Commission and a trustee monitoring the case had failed to take proposals it made last week fully into account before taking the action. No details of the Microsoft proposal were immediately available.

"In the interest of due process, we think it would have been reasonable for the Commission and the Trustee at least to read and review these new documents before criticizing them as being insufficient," Microsoft general counsel Brad Smith said in a statement.

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 Dec. 15.

The EU Commission said it based its decision on a report of the monitoring trustee of the last year's agreement which said Microsoft's concessions were insufficient so far.

The EU ordered Microsoft in March last year to pay US$587.55 million, share code 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.

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