Microsoft has vowed to appeal against a fine of 聙280.5 million ($357.5 million) issued by the European Union on Wednesday.
The EU competition watchdog accuses the software colossus of failing to comply with its 2004 antitrust ruling. Raising the pressure on Microsoft, the EU also threatened fines of 聙3 million ($3.8 million) per day, from the end of July, if the company continues to defy the ruling.
In 2004, after a five-year investigation, the EU ruled that Microsoft had broken European law by using its 鈥渜uasi-monopoly鈥� in personal computer operating systems to thwart rivals.
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In addition to fining the company 聙497 million, the EU ordered Microsoft to sell a version of Windows without Media Player software installed and to divulge code to the makers of rival products. Microsoft paid that fine but has been unwilling to reveal some computer code to its competitors. Microsoft argues that it has already released enough code and that the commission鈥檚 original ruling was too vague.
Illegal conduct
On Wednesday, the EU Competition Commissioner Neelie Kroes said she had 鈥渘o alternative鈥� other than to impose new fines. 鈥淚 sincerely regret that the company has not put an end to its illegal conduct,鈥� Kroes told a news conference on Wednesday. 鈥淭he European Commission cannot allow such illegal conduct to continue indefinitely.鈥�
鈥淣o company is above the law, each and every company, large or small, operating in the European Union must obey EU law, including competition law, for the benefit of all companies and consumers,鈥� Kroes added.
But, Microsoft swiftly shot back with plans to appeal in court. 鈥淲e do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission鈥檚 original decision and our good-faith efforts over the past two years,鈥� said the company鈥檚 general counsel Brad Smith.
鈥淲e will ask the European courts to determine whether our compliance efforts have been sufficient and whether the commission鈥檚 unprecedented fine is justified,鈥� Smith added.
鈥淒irect challenge鈥�
Microsoft challenged the 2004 ruling in the EU鈥檚 second-highest court in April 2006, but a decision on the appeal is not expected before the end of the year.
A group of Microsoft鈥檚 rivals, including Adobe, IBM, Oracle and Nokia, welcomed the new fines. 鈥淣o competition authority can or should tolerate such a direct challenge to its authority,鈥� said the group鈥檚 legal counsel Thomas Vinje. 鈥淢icrosoft continues to profit in the market from every new day of non-compliance,鈥� he added.
Kroes acknowledged that Microsoft had made progress in recent weeks to release key information to rivals but this process needed to be monitored and reviewed by an independent trustee.
鈥淲e have to wait for the final result, but over the last three weeks, they did an extremely good job,鈥� Kroes said. 鈥淢y only remark is why wait that long, and why not do that earlier?鈥�
