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EU Fines Microsoft for Violating Anti-Trust Ruling

MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block. Today, Europe's top anti-trust authority slapped Microsoft with a fine of $357 million for failing to comply with a legal order dating back to 2004. That ruling was designed to level the playing field for Microsoft's rivals in the computer server market. Microsoft immediately vowed to appeal today's fine. From Seattle, NPR's Wendy Kaufman reports.

WENDY KAUFMAN reporting:

Back in March of 2004, the European Commission ordered Microsoft to give its rivals reams and reams of information that would help them compete against Microsoft in Europe. It was an unprecedented order, and European regulators say Microsoft didn't comply. Last December, the commission said it might impose sizable daily penalties on Microsoft. Today in Brussels, that's just what the commission did. European Commissioner Neelie Kroes.

Ms. NEELIE KROES (European Commissioner for Competition): No company is above the law, and that is why the commission has today fined Microsoft a total of 280.5 million euros.

KAUFMAN: The European commissioner went on to warn Microsoft that if it doesn't fully comply with the order by the end of the month, the daily penalties would double to three million euros, or approximately $3.8 million a day.

This is the last major anti-trust case that Microsoft is facing, and the company is challenging the legal underpinnings of the case in court. But in the meantime, the company says it has tried to comply with the order by producing enormous amounts of technical material.

Earlier this year, Microsoft and a commission trustee worked out a timeline for what specific information needed to be supplied and when. The company currently has about 300 people working on that project. Microsoft General Counsel Brad Smith told NPR today that more than 7,500 pages of new material has been turned over, on time, to good reviews. And that the last set of documents will be produced, as required, within a few days.

Mr. BRAD SMITH (Microsoft General Counsel): I don't think we should have to pay a fine because there was the absence of that kind of dialogue. Frankly, we always did everything we were told, and the fact that we didn't get more guidance doesn't mean, in our view, that we should be fined for the hard work we did do in 2004.

KAUFMAN: And Smith wonders why the commission is imposing a fine now, since the commission's own deadline won't be reached until the end of the month. But European Commissioner Kroes suggests that Microsoft is being disingenuous. The original 2004 decision is crystal clear, she says, adding, I don't buy Microsoft's line that they didn't know what was being asked of them.

Thomas Morgan, a law professor at George Washington University, says that with today's fines, the commission is re-asserting its contention that Microsoft has abused its market power.

Prof. THOMAS MORGAN (Law, George Washington University): It will play well in Europe that a major American company is getting beaten up by the commission, but it seems to me to be weak on the merits, although the standard of abuse of dominant position - which is the standard they're applying - is a somewhat different one than we apply in this country.

KAUFMAN: It's now up to the European courts to decide whether the commission's legal premise and fine are justified. In the meantime, Microsoft says it will pay the $357 million and seek reimbursement if the rulings go its way.

Microsoft can certainly afford to pay. The company has more than $30 billion in cash. Wendy Kaufman, NPR News, Seattle. Transcript provided by NPR, Copyright NPR.

Wendy Kaufman