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Story URL: http://management.silicon.com/government/0,39024677,39127456,00.htm

EU threatens Microsoft with $5m fine each day...
...until it releases Windows without Media Player...

By Reuters

Published: Monday 31 January 2005

The European Commission on Friday held out the possibility that Microsoft may be fined up to five per cent of its average daily turnover unless it complies soon with a European Union antitrust decision.

Last month, Microsoft lost a months-long court bid to suspend sanctions for breaking the law and said it would offer a stripped-down version of Windows and share some protocols with rival makers of servers by early February.

EU spokesman Jonathan Todd said on Friday: "We obviously expect the remedies to be complied with within a matter of weeks - measured from last December - rather than months."

Asked what the EU executive can do if the software giant fails to comply, Todd said: "The... regulation allows the Commission to decide to impose penalty payments up to five per cent of Microsoft's average daily turnover."

Microsoft's turnover in the year that ended in June was $36.8bn. Five per cent of that is about $5m a day.

Todd also said Microsoft must refrain from contractual terms that would make the unbundled version less attractive.

The Commission decided 10 months ago that Microsoft abused its virtual monopoly of the Windows operating system and has already fined the company €497m.

Microsoft has already paid the fine.

Microsoft chairman Bill Gates will be visiting Brussels next week and will meet with some members of the European Commission, but not with Competition Commissioner Neelie Kroes, who is in charge of the Microsoft antitrust case.

A Microsoft representative, asked about Todd's comments, said: "Microsoft is committed to complying with the Commission's decision and is working with the Commission toward that goal."

The Commission found that Microsoft bundled Media Player to cripple rivals such as RealNetworks's RealPlayer, which it pushed off its perch as the dominant player.

The EU's remedies require some versions of Windows to be shipped to computer makers in Europe without audiovisual software, a decision the Commission designed to prompt computer makers to choose from various audiovisual offerings instead of accepting the Windows bundle.

The Commission ordered Microsoft to share data protocols - software rules of the road - with makers of work group servers that are used in offices to access files and run printers.

Microsoft's main appeal of the Commission's ruling against it will be heard by a panel of five judges of the EU's Court of First Instance.