EU threatens new fines against Microsoft

The European Union on Thursday threatened Microsoft Corp. with fines of up to $4 million US a day, saying the software giant had failed to live up to promises to provide information that could help rivals make Windows-compatible software for workgroup servers.

"This is a company which apparently does not like to have to conform with antitrust decisions," said EU Commission spokesman Jonathan Todd.

A call was placed for comment to a Microsoft representative in Europe but there was no immediate reply.

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

Under a "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.

"Microsoft has agreed that the main basis for pricing should be whether its protocols are innovative," said EU Antitrust Commissioner Neelie Kroes said in a statement.

"The Commission's current view is that there is no significant innovation in these protocols. I am therefore again obliged to take formal measures to ensure that Microsoft complies with its obligations," Kroes said.

Microsoft has four weeks to reply to the Commission after which the EU could impose fines, Todd said.

EU actions would apply to Vista

Workgroup servers are designed to let numerous users share and exchange information on projects so that groups of workers located away from their offices can collaborate on joint projects. Kroes said the measure would also apply to the new Vista system.

Microsoft is challenging the EU's original 2004 antitrust order at the EU's Court of First Instance. The 2004 antitrust order found the company broke competition law for abuse of a dominant position and fined the software maker a record 497 million euros ($657 million US).

"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."

"We don't want to be in a situation where 10 years after an antitrust decision, they still are not in compliance," said Todd, adding the "vast majority of the information" provided to the software competitors, was "not innovative."

To remedy Microsoft's antitrust abuse, the EU ordered the company to sell a copy of Windows without its media player software and told it to share communications code and information with rivals to help them develop server software that worked smoothly with Microsoft's ubiquitous Windows desktop operating system.

EU regulators fined Microsoft another 280.5 million euros ($371 million US) last July for failing to supply the "complete and accurate" interoperability required.