Microsoft Slapped with 280.5m Euro Fine

As expected, the European Commission on Tuesday slapped Microsoft with a 280.5 million euro fine for continuing non-compliance with its March 2004 antitrust decision. While right now that figure comes to 1.5 million euros per day for the period between December 15 and June 20, the EU has threatened to increase the fine to 3 million per day if Microsoft is not compliant by the end of the month.

Microsoft's lack of progress and contempt for the Commission pushed regulators to take action against the company. Last year, the EU gave Microsoft until December 15 to come into compliance or face a 2 million euro per day fine. Instead of settling with the EC, the Redmond giant made a series of moves apparently aimed at embarrassing the Commission, including the release of confidential documents.

At a press conference announcing the EC's decision, competition commissioner Neelie Kroes said Microsoft's defense that the antitrust decision is vague in what it asks was unfounded, as its wording was clear in what it asked of the company. "And in order to increase the incentive for Microsoft to comply, the Commission has decided the ceiling for potential fines will be raised," she added.

Kroes has been frustrated with Microsoft's lack of compliance, and has even taken steps to personally meet with Microsoft executives to settle the spat. In a statement made before Wednesday's press conference, Kroes attempted to make it clear that the EC and EU had done all it could before the fines were imposed.

"I regret that, more than two years after the decision, and despite an order from the president of the Court of First Instance that the Microsoft appeal to the court does not suspend Microsoft's obligation to comply, Microsoft has still not put an end to its illegal conduct," the statement read.

In a statement issued Wednesday morning, Microsoft again repeated its defense that a fine was unnecessary and called the decision vague. Additionally, it said it did all it could to comply with the EU's demands.

"The fine announced today is larger than the fines the Commission has imposed for even the most severe competition law infringements, such as price- fixing cartels," general counsel Brad Smith said. "When you consider Microsoft's massive efforts to comply with this ruling, and the fact that more than a dozen companies are already using similar documentation provided in the U.S. to ship actual products, we do not believe this fine is justified."

JupiterResearch senior analyst and Microsoft pundit Joe Wilcox said that both sides have their reasons to argue over the decision's specifics. "[Microsoft] has many reasons why it shouldn't want to license the protocols, such as Microsoft historical practices on licensing technology of this type or philosophical positions about licensing in general," he said. "Likewise, the EU has good reason to demand the licensing."

Microsoft said it plans to appeal the fine in the EU's Court of First Instance.