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Microsoft Defends Itself Against EU Antitrust Fines

Microsoft Defends Itself Against EU Antitrust Fines
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Apr 2, 2006 6:00 AM PDT    Text size: 
BRUSSELS — Rivals of Microsoft aren’t satisfied with the firm’s defense against fines levied by the European Union for failing to comply with remedies imposed for antitrust violations.

Microsoft, which lost a 2004 antitrust decision in EU courts, faces a 2 million euro-per-day fine for what the European Commission calls delays in complying with the earlier judgment. The earlier ruling found that Microsoft had taken advantage of Windows’ market dominance to hurt its rivals. Microsoft was ordered to pay half a billion euros and share information with rival software firms so that its competitors could make their software run smoothly with the Windows operating system.

While a decision from the two-day hearing is not expected for several weeks, Microsoft opponents have come out swinging.

Thomas Vinje, a lawyer for the European Committee for Interoperable Systems, said that Microsoft’s defense was “still not good enough.”

Microsoft argued that it has met the Commission’s demands. According to Microsoft, it has submitted 12,000 pages of documentation, along with plans to offer parts of its source code to competitors and 500 free hours of technical support from Microsoft engineers to it rivals.

Commission spokesman Jonathan Todd called the documentation supplied by Microsoft “totally useless.”

Microsoft shot back at the Commission, saying that it was not being treated fairly by the EU.

The U.S. mission to the EU in Brussels has rallied to support Microsoft, sending a recent letter to the Commission to express U.S. government concerns about allegations by Microsoft that it was being treated unfairly.

In the meantime, the fines will continue for Microsoft. According to Commission officials, the daily fines are the only weapon left against the company, which has vast cash resources.

Still, the fines don’t amount to much more than a thorn in Microsoft’s side.

“It's not the fine so much as the chilling effect the EU seems to want to have on innovation on new products,” Kim Caughey, an equity analyst for Fort Pitt Capital Group, said.

Microsoft's appeal against the Commission's 2004 decision that it broke antitrust rules is due to be heard in late April by the Court of 1st Instance, Europe's second-highest court.

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