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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

July 12, 2006 at 11:42 AM

A fine day for Microsoft

The European Commission imposed a fine of $357 million on Microsoft today in connection with its 2004 ruling that the company broke European antitrust law. Today the Commission cited Microsoft’s continuing failure to comply with its order to provide technical documentation to allow non-Microsoft servers to interoperate with Windows PCs and servers.

“I don’t buy Microsoft’s line that they didn’t know what was being asked of them because the March 2004 order is absolutely crystal clear,” Neelie Kroes, the Commission’s top antitrust official, said today at a press conference in Brussels, according to Cnet. “And in order to increase the incentive for Microsoft to comply, the Commission has decided the ceiling for potential fines will be raised.”

Interesting quote from Kroes, a Dutch politician who faced some criticism for her ties to business when she was first appointed as the Commission’s antitrust watchdog two years ago. The Commission already fined Microsoft $613 million in 2004, and today Kroes threatened fines of $3.82 million per day for noncompliance, starting July 31.

Microsoft General Counsel Brad Smith said the fine is not appropriate “given the lack of clarity in the Commission’s original decision and our good-faith efforts over the past two years.” He said Microsoft will appeal, a process that could take two years.

Jupiter Research analyst Joe Wilcox said this is one issue that will be very difficult for Microsoft and the EC to resolve.

Goldman Sachs dismissed the news as “not the worse case scenario.” Indeed, just for a sense of scale, today’s fine is only about 12 percent of Microsoft’s $2.98 billion third-quarter profit.

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