MS ANTITRUST - Regulators OK EU fine against Microsoft

The European Commission is set to fine Microsoft after EU regulators OK'd a plan to punish the company for failing to comply with a 2004 antitrust ruling.

The European Commission is poised to fine Microsoft again, after antitrust regulators from the 25 countries in the European Union gave unanimous support Monday to the Commission's plan to punish the company for failing to comply with its 2004 antitrust ruling, according to sources following the case.

The company faces a new fine of hundreds of millions of euros. The Commission, which acts as the main competition authority in the European Union, told Microsoft in December that it had failed to comply with the March 2004 ruling. Since then it has said that the company could be fined up to Euro 2 million (US$2.6 million, as of Monday) a day, counting from last December.

The Commission refused to comment on the closed door meeting it held Monday with the national regulators.

People following the meeting said there was some debate about whether to push ahead with a new fine now, as Microsoft prepares to submit information that it hopes will meet the requirements of the 2004 ruling.

On March 24, 2004, the Commission fined Microsoft Euro 497 million for leveraging its near-monopoly in the PC operating system market to gain advantage in the markets for workgroup server operating systems and media players.

Among other remedies, the Commission ordered Microsoft to release a version of Windows XP without a built-in media player, and to provide its competitors with details of certain communication protocols used by its server products. The Commission appointed a monitoring trustee to keep tabs on Microsoft's progress in meeting the remedies.

Initially Microsoft claimed it had submitted adequate information but in April it said it finally understood what information the regulator was asking for.

Since then it has been working closely with the Commission and the trustee, Neil Barrett, a computer expert picked by Microsoft to monitor the company's compliance with the 2004 ruling.

Microsoft said in a statement Monday that it is dedicating "massive resources" to ensure it meets "the aggressive schedule and the high quality standard" set by the Commission and the trustee.

Before Monday's meeting, some of the national regulators were expected to call on the Commission to back off, at least until the final batch of technical information has been submitted. It is due by July 18, according to deadlines agreed between the Commission, the trustee and Microsoft.

But there was no real attempt to put the brakes on the process. "On the contrary, the national regulators were all right behind the Commission," said one source close to the proceedings.

The next step in the process is another meeting between the Commission and national regulators next Monday to decide how much to fine Microsoft for failing to honor the 2004 ruling.

If the commission fines Microsoft Euro 2 million a day, as it has threatened to in recent months, the fine would total over Euro 400 million - nearly as much as the first fine two years ago.

A final ruling is expected on Wednesday next week.

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