Europe Threatens Microsoft With Daily Fines

LONDON — The European Commission, the executive arm of the 25-nation European Union, has said that U.S. software giant Microsoft Corp. has failed to make interface and interoperability information available to competitors as it was obliged to do under a March 2004 decision and that daily fines may result.

The EC said it would give Microsoft five weeks to respond to its “Statement of Objections” after which it may impose a daily fine. In previous documentation a daily fine of 2 million euro (about $2.4 million) was mandated.

The March 2004 decision found that Microsoft had infringed European laws on the abuse of a dominant position by leveraging its near monopoly in the market for PC operating systems to gain market share in the market for work group server operating systems and for media players.

A remedy imposed at the time 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.

Microsoft was also fined 497 million euros (about $600 million), share code with rivals and offer an unbundled version of Windows without the Media Player software.However, the European Commission said Thursday (Dec. 22) that after 20 months it was its preliminary view, supported by two reports from Professor Neil Barrett, who serves as an advisor, that Microsoft has not yet provided complete and accurate specifications for this interoperability information.

“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,” said Competition Commissioner Neelie Kroes, in a statement.

Neil Barrett, the monitoring trustee, said in a report quoted by the European Commission in its statement: “Any programmer or programming team seeking to use the Technical Documentation for a real development exercise would be wholly and completely unable to proceed on the basis of the documentation. The Technical Documentation is therefore totally unfit at this stage for its intended purpose.”

The report also states that, “the documentation appears to be fundamentally flawed in its conception, and in its level of explanation and detail... Overall, the process of using the documentation is an absolutely frustrating, time-consuming and ultimately fruitless task. The documentation needs quite drastic overhaul before it could be considered workable.”

The monitoring trustee is a computer science expert appointed by the Commission but drawn from a shortlist submitted by Microsoft.The European Commission said it was still considering a second part of the remedy imposed in March 2004, that Microsoft make the interoperability information available on reasonable terms.