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Story URL: http://management.silicon.com/government/0,39024677,39170206,00.htm

EC monopoly warning after record Microsoft fine
"If you flee the rules, you will be caught. And it will cost you dearly"

By Dawn Kawamoto

Published: Thursday 28 February 2008

Competition commissioner for the EC, Neelie Kroes, has issued a stern warning to any company planning to blow off the regulatory agency and European antitrust laws.

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Kroes warned: "If you flee the rules, you will be caught. And it will cost you dearly." This followed the European Commission's announcement it was slapping a $1.35bn fine against Microsoft for failure to comply with earlier March 2004 antitrust sanctions.

Kroes said: "Talk is cheap. Flee the rules and it will be expensive. We don't want talk and promises. We want compliance [with regulations]."

For Microsoft, its fine was calculated based on the 488 days it was out of compliance, Kroes said. And while Kroes characterised the fine as "substantial", she noted it represented 60 per cent of the total assessment the Commission could have levied on Microsoft.

Kroes, however, maintained the size of the fine was reasonable, given the length of time Microsoft was out of compliance with the historic March 2004 order and number of people, companies and government agencies affected.

Kroes said: "Microsoft continued to stifle innovation by charging other companies prohibitive royalty rates for the essential information they needed to offer software products to computer users around the world. The high rates made the rendering of [interoperability] information pointless."

To comply with the March 2004 order, Microsoft was supposed to offer rivals complete and accurate interoperability information so that their products would work with Microsoft's dominant operating system, as well as offer the information at a reasonable price.

Any company looking to avoid a clash with Kroes needs to keep one thing in mind. She said: "Our approach is to ensure companies and people have a right to choose...then the markets will deliver so much more."