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EC Threatens Microsoft With Daily Fines
by Ulrika Lomas, for LawAndTax-News.com, Brussels

26 December 2005

The European Commission last Thursday issued a Statement of Objections against Microsoft for its failure to comply with certain of its obligations under the March 2004 Commission decision, which found Microsoft to have infringed the EC Treaty rules on abuse of a dominant position by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players.

One of the remedies imposed by the decision was for Microsoft to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers.

The recently published Statement of Objections indicates that the Commission’s preliminary view, supported by two reports from the Monitoring Trustee, is that Microsoft has not yet provided complete and accurate specifications for this interoperability information. After giving Microsoft an opportunity to reply to the Statement of Objections, the Commission may impose a daily penalty.

Competition Commissioner Neelie Kroes announced that:

“I have given Microsoft every opportunity to comply with its obligations. However, I have been left with no alternative other than to proceed via the formal route to ensure Microsoft’s compliance.”

The obligations imposed by the March 2004 Decision were suspended pending the Court of First Instance’s consideration of Microsoft’s request for interim measures, a request denied by the Court of First Instance on 22 December 2004. After that date, the Commission engaged in discussions with Microsoft about its compliance, and conducted a market test of Microsoft’s proposals on interoperability.

In light of the results of that market test, the Commission issued a decision on 10 November 2005, which warned that should Microsoft not comply by 15 December 2005 with its obligation to: (i) supply complete and accurate interoperability information; and (ii) make that information available on reasonable terms, it would face a daily fine of up to €2 million.

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