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EU Hands Microsoft $357 Mln Antitrust Fine

In a move which clearly indicates their patience sis at an end, regulators for the European Union have fined Microsoft €280.5 million (about US $357.7 million) for failing to comply with the terms of a 2004 antirust settlement.

And that’s just the first step: the EU plans to hit Microsoft with bigger fines starting next month if the Redmond software giant doesn’t toe the line. The current fine covers the period from December 16 2005, to June 20 2006 at a rate of €1.5 million a day—and the meter’s still running. If Microsoft doesn’t comply by July 31, the per diem charge increases to €3 million.

The fine is the latest move in a long-running antitrust dispute between the software maker and the European Union. In a landmark 2004 decision, the European Commission fined Microsoft €497 million for antitrust violations. The current dispute extends from that decision, and centers on Microsoft’s bundling of media player and messaging technologies into the Windows operating system as well as alleged failure to disclose technical information which would enable third parties to successfully interoperate with Microsoft server products.

For its part, Microsoft says it has undertaken substantial efforts to comply with EU mandates, but complains the process are vague and the European Commission keeps altering its requirements mid-stream. "We have great respect for the Commission and this process, but we do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission’s original decision and our good-faith efforts over the past two years," said Microsoft’s general counsel, Brad Smith. "We will ask the European courts to determine whether our compliance efforts have been sufficient and whether the Commission’s unprecedented fine is justified."

Of course, Microsoft plans to appeal the fine, but also says the final bundle of information demanded by regulators will be delivered July 18.

The EU’s approach to Microsoft’s compliance with antitrust actions is a bit of a contrast to that of the United States, which concluded a similar case against the software maker in 2000. The U.S. Justice Department is still waiting on documents required of the company in 2002.