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July 31, 2006

Microsoft waits for word on extra EC fines

Microsoft Corp has submitted final technical documents to the European Commission in a bid to comply with the regulator's antitrust ruling.

By CBR Staff Writer

But the software maker, the world’s largest, will have to wait to hear whether those documents will keep it from racking up additional fines, according to the EC.

It’s too early at this stage to give any indication of whether there will be another payment, another penalty, and if there is to be another penalty how much it would be, Commission spokesman Michael Mann reportedly said at a news briefing in Brussels.

The latest documents from Microsoft must first be analyzed to ensure they provide enough information to enable server software from competitors to work as well with Microsoft’s Windows operating system as Microsoft’s own software does, Mann said.

The EC has threatened as much as $3.82m a day in additional fines for Microsoft’s continued failure to comply with its 2004 ruling.

In March 2004, the EC fined Microsoft a record $613m for breaking antitrust law and demanded Microsoft make its server software code available to rivals in order for non-Microsoft work group servers to run as well as Microsoft’s on Windows PC and servers.

The EC also required Microsoft to release a version of Windows without its Media Player software, which the Redmond, Washington-based software maker did.

Microsoft also released a 1,200-page technical manual to its competitors, but the EC ruled it was inadequate.

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In July, the EC fined Microsoft $356m for defying its earlier ruling. At the time, the EC warned that Microsoft must comply or else it would face even larger fines.

The regulators previously said Microsoft had not yet produced complete and accurate technical specifications to help its rivals better compete against Microsoft’s software. The EC’s July 12 decision was based, in part, on testimony from rivals and independent experts that said the technical manual from Microsoft needed a major overhaul for it to be of use.

Microsoft said, in a statement, that it was committed to complying with the EC’s order. In the past, however, the company has argued its right to protect its intellectual property and not release sensitive proprietary information to its rivals.

Microsoft is planning to challenge the fines imposed in July in the European courts. The company had previously said the EC has not been clear about Microsoft’s obligations and what it needs to do to comply. The EC has denied this claim by saying the 302-page order it gave to Microsoft in 2004 was explicit.

The EC and an independent monitor are currently analyzing the latest technical documents, Mann said. The EC gave no indication of how long that process would take.

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