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Microsoft faces €2m daily fines

EU prepares to get tough

It has emerged today that Microsoft's perceived failure to comply to an antitrust ruling imposed in 2004 on the company by the European Commission will lead the EC to propose another fine of up to €460m (about £317m), according to sources close to the case.

The EC ruled two years ago that Microsoft was abusing its dominant position in the market by denying competitors access to documentation about its Windows operating system.

The imminent threat of a fine comes as Microsoft continues to submit information to the regulator, with the aim of complying with the ruling. The final instalment of documentation is due on 18 July - a deadline Microsoft said it agreed with the monitoring trustee in charge of overseeing Microsoft's compliance with the ruling, Neil Barrett.

Yesterday the Commission, Europe's top antitrust regulator, will propose a negative ruling and a new fine against Microsoft to national competition regulators from the 25 countries in the EU, the people close to the case said.

A final decision could be taken by the EC as soon as 12 July, if the national regulators support the Commission's draft ruling.

Commission spokesman Jonathan Todd declined to comment on the content of the draft decision but confirmed that it was imminent.

"We have said for some time we would decide whether or not to impose daily fines on Microsoft before the end of this month," he said.

If the Commission sets the fine at €2m (£1.4m) a day, as it has threatened to in recent months, the fine would reach €460m by 18 July, the date Microsoft submits the final instalment. The calculation counts all seven days of the week and dates back to 15 December 2005 when the Commission found Microsoft in breach of its 2004 antitrust ruling,

This would be nearly as much as the record €497m (£343m) fine the Commission imposed on Microsoft in the first place.

"Any fine would be unjustified and unnecessary," said Horacio Gutierrez, associate general counsel of Microsoft Europe in a statement today.

"The Commission's process calls for an advisory committee meeting, so this comes as no surprise," Gutierrez said.

But he added that Microsoft has committed "massive resources" to providing the technical documentation required in the 2004 ruling.

Microsoft "has already delivered five of seven instalments of technical documentation developed to the agreed specification and according to the agreed work plan", Gutierrez said.

The sixth is due at the end of this month and the final submission will be handed over on 18 July, he said.

"Microsoft is working hard to also meet those deadlines," Gutierrez said.

Microsoft could be fined even if the seven instalments of documentation do satisfy the regulator, one person close to the case said. "Even if they change their ways in the future that doesn't get them off the hook for the period starting last December," the person said.


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