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The European Union could fine Microsoft up to $4 million USD per day for non-compliance with antitrust rulings

It looks like the European Union (EU) is after Microsoft yet again. In 2004, the EU Commission fined Microsoft $634 million USD for its monopolistic business practices. In July of 2006, the EU once again fined Microsoft to the tune of $375.4 million USD for failing to comply with antitrust rulings. The EU also took Microsoft to task over the security features in Windows Vista citing a threat to competition in the marketplace.

Today, we learn that the EU is looking to fine Microsoft $4 million USD per day for not providing affordable tools to help its competitors develop compatible software for Windows-based operating systems.

"This is a company which apparently does not like to have to conform with antitrust decisions," said Jonathan Todd, a spokesman for the EU Commission. "In the 50 years of European antitrust policy, it is the first time we have been confronted by a company which has failed to comply with an antitrust decision... We are in unknown territory. We don't want to be in a situation where ten years after an antitrust decision, they still are not in compliance."

Microsoft has been given four weeks to respond to the EU's demands or face the daily fine. The EU contends that Microsoft's has shown no basis for the pricing of its patented communication protocols (i.e. Base Authentication and Authorization, Domain Services Interaction, Print RPC, etc.), thus it has formally rejected over 1,500 pages of pricing proposals put forth by the Redmond, WA-based company.

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

Microsoft, as expected, was quick to respond to the latest round of requests from the EU. "It is hard to see how the Commission can argue that even patented innovation must be made available for free," said Microsoft General Counsel Brad Smith. Microsoft has offered access its IP for a price that is 30% below the current market rate, but the EU thinks that Microsoft's price should be closer to $0.

"No companies have signed up for Microsoft's [proposals] because it is too expensive," said Todd.

Microsoft has reiterated that it has done everything in its power to comply with past EU rulings. "[Microsoft] has spent three years and many millions of dollars to comply with the European Commission's decision. We submitted a pricing proposal to the Commission last August and have been asking for feedback on it since that time," said Smith.

You can read the EU’s formal complaint here, while a FAQ on the decision can be accessed here. Microsoft has also made available a table (PDF) of proposed pricing for its IP.





"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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