- Title: BELGIUM: European Union warns could slap bigger fine on Microsoft
- Date: 1st April 2006
- Summary: SIGN READING EUROPEAN COMMISSION EXTERIOR OF COMMISSION
- Embargoed: 16th April 2006 13:00
- Location: Belgium
- Country: Belgium
- Topics: Industry
- Reuters ID: LVA47LC317VW9A1VR0ZT1WUZYS5F
- Story Text: Microsoft continued its last-ditch bid to avoid anti-trust fines on Friday (March 31) on the second day of a closed hearing in Brussels and U.S. diplomats urged European Commission to treat the company fairly.
At the hearing, which began on Thursday, Microsoft is defending itself against the fines of up to 2 million euros a day which the Commission set for what it calls delays in observing a 2004 antitrust decision.
The Commission accused Microsoft then of abusing the dominance of its Windows operating system to hurt rivals. It fined the U.S. company nearly half a billion euros and ordered it to share information with rival makers of server software.
One lawyer representing competitors said Microsoft's documentation did not go far enough.
The two traded blows on the first day but Microsoft's top lawyer Brad Smith said he was more optimistic about dialogue.
"I will say that I thought we had a very constructive dialogue yesterday. I only wish we could have had that kind of dialogue sooner. But as we start the second day, I am more optimistic than when I arrived yesterday that this type of constructive dialogue can in fact lead to a real solution," Smith, said, going in to the hearing.
No conclusions will be reached at the highly publicised hearing and the Commission said it will decide whether to proceed with or drop the fines within several weeks.
As part of the remedies in the 2004 decision, Microsoft was ordered to share information with rivals so they can make software, such as those running printers, work as smoothly with Windows desktop machines as Microsoft's own software.
A lawyer representing competitors of Microsoft at the hearing said that Microsoft's arguments so far were still insufficient.
Thomas Vinje, lawyer for the European Committee for Interoperable Systems (ECIS) which groups companies such as Oracle and IBM, told reporters Microsoft's defence "was still not good enough."
"The Commission has said it's not good enough, ECIS said its not good enough and everybody who's looked at it other than Microsoft and its paid witnesses says it's not good enough. Yes, it's absolutely clear its not good enough," Vinje said.
Microsoft says it has more than met the Commission's demands and that it is willing to do more.
But the European Commission said it could fine Microsoft up to 5 percent of its turnover if it finds that it continues to fail to comply with its competition rules.
Speaking in Brussels on Friday (March 31) on the second day of the Microsoft closed hearing, Jonathan Todd, European Commission Competition spokesman, said the Commission would need time to assess the findings of the independent hearing.
Todd said it was too early for the Commission to decide on documentation put forward in the hearing but stressed that as far as the Commission the case was clear cut.
"We are not asking Microsoft to give away their crown jewels. We're not asking them to allow companies to make copies of Windows, we are simply asking them for the relevant technical information to allow companies to make products that inter-operate with Windows. And it's not that complicated. Where there is a will there is a way," Tod d said.
The Commission has already rejected Microsoft's submission of 12,000 pages of documentation and its offer to give parts of its vital source code for work group servers as well as 500 hours of free technical support from Microsoft engineers to software developers.
Microsoft is facing a 2 million-euro daily fine for dragging its feet over implementing remedies after the Commission decided in 2004 that it had abused the dominance of its Windows operating system to damage competitors.
Asked what the Commission would do if Microsoft chose to pay the daily backdated fine and continue its current practice Todd warned Europe could deal the company a higher blow and syphon off up to 5 per cent of the company's turnover.
"We've been waiting for two years now, we hope we won't have to wait that much longer, but if for example the fines of up to 2 million euros a day don't result in Microsoft complying then we'll have to consider whether we need to apply higher daily fines. We can apply daily fines of up to 5 per cent of Microsoft's global turnover.. that's a lot of money when you consider that last year their turn over was in the region of 40 billion dollars," Todd said.
Todd later told a Commission daily briefing that Microsoft's antitrust case was not raised when senior European Union and U.S. competition officials met in Washington on Thursday.
In a letter, a copy of which was seen by Reuters on Thursday, the U.S. mission in Brussels urged the Commission to treat Microsoft fairly and said its claims of unfair treatment, "are of substantial concern to the United States" if accurate.
Todd confirmed a letter had been sent from the U.S. mission in Brussels to the Commission but he declined to comment on its content.
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