EU Warns Microsoft May Face More Fines

The European Commission has warned American software giant Microsoft that it may face further fines in its long-running antitrust displute, this time for over-charging software developers for technical data needed to interoperate with Microsoft’s systems.

As part of an antitrust ruling in 2004, Microsoft was found to have abused its monopoly position in the operating system market, and was required to disclose “complete and accurate” interface documentation for its workgroup server systems under “reasonable and non-discriminatory terms” so developers of third party products could successfully interoperate with Microsoft’s systems. After considerable complaining and delay, Microsoft slid a heap of documentation in just under the wire, claiming the information was the result of a mammoth technical effort involving tens of thousands of hours of labor.

Now, the European Commission has filed a Statement of Objections to Microsoft’s actions, claiming the company has refused to comply with antitrust requirements and that, in the Commission’s preliminary view, the 51 documented protocols contain “virtually no innovation” so the prices Microsoft proposes to charge developers for the data are unreasonable. Further, the Trustee found that many technologies comparable to those claimed by Microsoft as innovations are available from other sources royalty-free.

Microsoft has been given four weeks to reply to the Statement of Objections; after that, the Commission may impose a daily penalty for failing to comply with the 2004 antitrust decision. It would be the second time Microsoft would face daily penalties: the European Commission previously threatened to fine Microsoft up to €3 million a day unless the company delivered the interoperability docmentation by July 31, 2006. A European Commission spokesperson characterized Microsoft’s behavior: “In the 50 years of European antitrust policy, it’s the first time we’ve been confronted with a company that has failed to comply with an antitrust decision.”

In a release, Microsoft characterizes the threat of further fines as unreasonable, arguing “It is hard to see how the Commission can argue that even patented innovation must be made available for free.” Microsoft vows to work hard to address the EC’s Statement of Objections.