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Microsoft may face massive EU fine

Obstruction of justice could cost software co $2.5bn

The European Commission, the executive body of the European Union, is planning to hit Microsoft with a massive fine for antitrust violations, according to a report published today in The Wall Street Journal. Commission officials played down the report, refusing to comment on details of the investigation.

Citing a confidential Commission document outlining its case, the newspaper said the Commission alleges that "Microsoft misled investigators and sought to obstruct the case," and as a result will impose the largest fine it can while demanding that Microsoft remove some features from its Windows software.

The allegations of attempting to mislead focus on a series of letters from customers which Microsoft supplied the Commission.

EU Commissioner for Competition Mario Monti refused to comment on the substance of the investigation, including details of the supposed misleading letters, when questioned at a regular news conference in Brussels on Wednesday morning.

Monti was dismissive of the newspaper's claims for the magnitude of fine that may be imposed.

Under EU law, Microsoft can be fined up to 10 percent of its annual revenue, or $2.5bn, the report said.

"To speak of fines when Microsoft has not even replied is premature. To enter this game of calculating a fine does no service to the public at large," he said.

Microsoft has been given a little extra time to make its response to the case, Monti said.

In August, the EU confirmed that it had merged its two antitrust investigations into Microsoft's operating systems, and was in the process of determining if Microsoft had violated European antitrust rules by "using illegal practices to extend its dominant position in the market for personal computer operating systems into the market for low-end server operating systems."

The EU has charged that Microsoft has been actively attempting to dominate the corporate and Internet computer software market with its Windows and Office software while also attempting to put a stranglehold on competing software for operating music and video over the Web, all in violation of European antitrust laws.

Microsoft remained tight-lipped about the matter.

"We have no further comment in relation to the story in The Wall Street Journal. The EU investigations are confidential in nature and we are respecting that confidentiality," a spokeswoman for Microsoft in the UK said.

The report comes the day after the US Supreme Court rejected Microsoft's appeal to overturn a lower court's ruling that the company violated antitrust laws.

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