EU may raise cap for Microsoft daily fines

Europe will raise future fines on Microsoft to $3.82 million a day if it keeps defying antitrust ruling, source says.

Tech Industry
The European Commission plans to raise the ceiling of future fines on Microsoft to $3.82 million a day if the company continues to defy an antitrust decision, a diplomatic source said Monday.

He was speaking as European competition regulators met to discuss the amount of a fine the European Union's executive arm will impose on the software giant for failing to comply with the 2004 decision that it abused its dominant market position.

The Commission, which is the European Union's executive arm, declined to comment.

This would be the first time the Commission has fined a company for what it sees as defying an order to remedy an abuse. The current ceiling for the fine is $2.55 million a day.

The penalty, likely to run into hundreds of millions of dollars, comes on top of a record $632.6 million (497 million euro) fine the Commission already imposed in its landmark antitrust decision against Microsoft in March 2004.

It signals the Commission's determination to force Microsoft to obey its decision as well as a loss of patience after the company has had two years to comply and has used every available legal avenue to spin out the process.

The Commission, Europe's top antitrust authority, ruled in 2004 that Microsoft shut out rivals by withholding information that would help them make server software as compatible as Microsoft's own with its ubiquitous Windows operating system.

It demanded that Microsoft provide that information and now says the company has not done so sufficiently.

A source told Reuters on Friday that the Commission was ready to raise the fine if Microsoft remained defiant.

The Commission can set a fine of up to 5 percent of a company's average daily turnover in the previous year. Microsoft's turnover in 2005 was $40 billion, according to its Web site, averaging just under $110 million a day.

The current fine would be backdated to run from Dec. 15 to the date when officials from national competition authorities met to endorse the Commission's proposal. The date of the meeting has not been made public.

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