EU Threatens Microsoft With New $446 Million Fine

In what was probably an inevitable ultimatum, the only question surrounding which may have been when it would come, the European Commission today publicly issued a warning that Microsoft must turn over what it describes as the “complete documentation” regarding interoperability protocols for Windows, or else face a fine retroactive to last July totaling €348 million (USD$445.7 million), plus €3 million per day thereafter for continued non-compliance.

The EC’s statement today did not say anything in particular was missing from the documentation turned over thus far by Microsoft, which the EC did acknowledge it had already received. Working under an agreement with the EC’s appointed monitoring trustee, Dr. Neil Barrett, Microsoft turned over documents in seven stages, the final one having been received on July 19.

But in a puzzling maneuver last summer, the EC hastily convened a meeting on July 12 –- one week before the final deadline to which Dr. Barrett had already agreed –- to state that the actual final deadline was that day, and that Microsoft was already late. For that reason, the EC imposed yet another €280.5 million fine retroactive to the previous December, when the Commission ruled the company stood in non-compliance.

All sides had previously acknowledged that Microsoft complied with the previously understood July 19 deadline, though this morning’s EC statement claims the company missed that date. In so stating, the EC acknowledged the final date was July 19, thus calling into question why the company was found to have missed that date the week before.

“As of today, the Commission has not received the complete documentation regarding all relevant protocols that is required to comply with its March 2004 Decision,” the EC statement this morning reads.

“This being said, progress has been made towards turning the information supplied by Microsoft to date into specifications to be made available to potential licensees for testing. The Commission expects the remaining omissions and deficiencies in the technical documentation to be remedied by 23rd November so that by the end of November the entire set of technical documentation will be available for potential licensees to review.”

In an interview with the British newspaper The Guardian today, EC Commissioner for Competitiveness Neelie Kroes said, “I don't have eternal life...I am not impressed if someone says 90 percent of the information is already there when we need 100 percent. It's a jigsaw and some parts are missing...In my opinion, this information should have been here a couple of months ago.”

It isn’t clear what’s missing – whether, for instance, there were specific papers that Microsoft was supposed to have filed but failed to (although previous indications from the EC were that it did receive at least all its anticipated deliverables), or whether what the EC did receive was simply 90% complete rather than 100%. Microsoft has yet to issue a statement on the EC’s latest request, though BetaNews will provide that statement when it does.