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Software giant balks at penalties

The European Union appears set to keep its hard-line stance against Microsoft’s allegedly anticompetitive tactics, and it is insisting on imposing a €899 million ($1.36 billion USD) fine on the company to keep its future actions in line.

Microsoft’s lawyers disagree, however, and entered a variety of arguments last May that the fine is too high, and was entered based upon “manifest errors” in the EU’s process. With copies of the arguments released publicly earlier this week (PDF), its demands to annul the fine are now available for perusal worldwide:

  • The EU “erred” in its decision to subject Microsoft to regular, periodic fines while the company released copies of its interoperability specifications, due to the fact that Microsoft’s pricing for the documentations was not in line with the EU’s definition of “reasonable,” – the EU never explicitly stated what it considered a “reasonable” price to be.
  • Further, licensing rates for information on its proprietary protocols – despite not passing the EU’s benchmark of reasonability – were more than 30 percent lower what industry experts PriceWaterhouseCoopers determined to be a fair price for “comparable technology.” (Ars Technica questioned this finding early last year, noting that in many cases ‘comparable technology’ was open source, and therefore free.)
  • Microsoft should not have been subjected to a “heightened patentability test,” where the innovation of its trade secrets was placed under scrutiny in order for the EU to decide whether or not Microsoft should have charged royalties for the use of its trade secrets.
  • The EU based some its assessment reports on documents obtained that courts later determined to be “unlawful.”
  • Microsoft was denied its “right” to be heard due to the EU’s failing to give Microsoft the opportunity to speak up after the period for which it was fined, preventing the company from “commenting on all relevant aspects of the case.”
  • And, simply, the fines imposed are “excessive and disproportionate,” particularly due to the fact that the EU chose to challenge its licensing practices.

Additionally, Microsoft previously appealed the fine to Europe’s Court of First Instance last May – however little has developed in the appeal since its filing.

The company’s trouble began in 2004 when the EU demanded Microsoft provide competitors the ability to connect to software running under its Windows platform (applications like Exchange and Active Directory). Third-party attempts to connect to Microsoft technologies have, typically, been written by reverse engineering the company’s communications protocols.

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RE: Fight and win
By Polynikes on 7/9/2008 9:38:08 AM , Rating: 2
The EU's fines have been unreasonable against MS. I agree with you, they shouldn't pay a dime.

Oversight like they have here in the US might be OK, but exorbitant fines? That's just greedy government.

RE: Fight and win
By Polynikes on 7/9/2008 10:21:08 AM , Rating: 2
I forgot to mention... If they're doing it for the customers' benefit, you know, since MS "screwed" the europeans, then there should be some form of tax cuts so they can get their money back.

But clearly that's not the case.

RE: Fight and win
By Aloonatic on 7/9/2008 11:11:27 AM , Rating: 3
That's always been the thing that I have never understood about these "fines".

For example, In the UK we have a lousy rail network, which you would think would be sorted as we all know that trains will save all the polar bears and seals from certain doom.

They were privatised, but they still go to the government for money when it doesn't work out for them. The shareholders still get their payouts however, even though they miss targets and deadlines so they get fined by the government, but then have to get loans and handouts from them as well???

Madness, where does this money go???

I'm no fan of the EU by the way.

This money will probably go to the friends and families of the EU/EC in dodgy handouts and "jobs" where their useless nephews turn up for an hour a week and get a yearly salary.

The EU is a terribly corrupt monster hell bent on creating a European super state (they already have a flag and an anthem, what more do they need?!?) and wants money to grow and expand.

I guess the other winners (apart from unemployable idiot relatives of MEPs and such) from this will be the former Eastern Block nations in the Europe who have joined the EU and need to be bought "up to spec" with lots of nice new roads and such like.

In saying all that, it's not just the EU who don't like large companies behaviour, including MS and Intel.

Most similar bodies to the EC/EU have had investigations into business prectices and such like.

The EU will always be the highest fine however as:

a) It is pretty damn large, nearly 500M people (that's continent though I think, not the EU but you get what I mean?)

b) Everything's more expensive over here.

Queue flaming about choosing to live in a socialists paradise etc etc etc....

"Vista runs on Atom ... It's just no one uses it". -- Intel CEO Paul Otellini
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