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Thursday, March 01, 2007

EU to Microsoft: You will pay and you will like it!

The European Union threatened Microsoft Corp. on Thursday with fines as high as $4 million a day, claiming the software company was still not offering a fair deal to rivals seeking to make their products more compatible with Windows.

Microsoft said the EU Commission's demands were not reasonable. "We believe we have been fair in setting" prices for the information, said Microsoft General Counsel Brad Smith.

"It is hard to see how the Commission can argue that even patented innovation must be made available for free," he said in a statement.

The EU complained that three years after a landmark antitrust ruling to open up the market, the world's largest software maker still refused to cooperate. "This is a company which apparently does not like to have to conform with antitrust decisions," said EU Commission spokesman Jonathan Todd.

Under a 2004 antitrust ruling by the European Union, Microsoft had to disclose complete and accurate interface documentation on reasonable and nondiscriminatory terms, allowing its competitors to interoperate with Windows PCs and servers.

Under a so-called "statement of objections" released Thursday, the EU's executive Commission said there was "no significant innovation" in the requested information. It also rejected 1,500 pages of submissions by Microsoft over the past three months and said Microsoft's price proposals were unreasonable.

"I am therefore again obliged to take formal measures to ensure that Microsoft complies with its obligations," EU Antitrust Commissioner Neelie Kroes said in a statement.

Smith complained Microsoft had asked for feedback half a year ago and only on Thursday received a reply thinly veiled in a threat.

"We're disappointed that this feedback is coming six months later and in its present form, but were committed to working hard to address the Commissions Statement of Objections," said Smith.

He added "the findings appear to be an attempt to regulate the pricing of our intellectual property rights on a global basis" something which would go beyond the jurisdiction of the European Commission.

Microsoft has four weeks to reply to the Commission after which the EU could impose fines going as high as 3 million euros ($4 million) a day, Todd said.

"It is the first time we have been confronted by a company which has failed to comply with an antitrust decision," said Todd. "We are in unknown territory."

It’s known as stonewalling, Todd Dude. Ever hear of it?

http://www.businessweek.com/ap/financialnews/D8NJEO0G3.htm

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