“No company is above the law.” So said EU Competition Commissioner Neelie Kroes after the European Union hit Microsoft with a $357 million fine for not complying with a previous ruling. “Microsoft has still not put an end to its illegal conduct…I have no alternative but to levy penalty payments for this continued compliance.”

In 2004, the European Commission fined Microsoft a record $613 million and ruled that the massive software company would have to provide competing companies information about its software.

Increasing its show of force, the EU recently threatened to increase fines by $3.8 million a day if Microsoft still refuses to comply, starting July 31.

However, the EU understands that, comparatively speaking, for a company that sees quarterly profits of close to $3 billion, these fines are manageable. Ms. Kroes said that with the most recent ruling, the Commission has shown “restraint.” The EU sets the ceiling for maximum fines at 5% of a company’s annual global revenue.

(Ironically, Ms. Kroes, as chairperson of Nijenrode University, awarded a honorary doctorate to Microsoft founder Bill Gates.)

Microsoft maintains it has done everything in its power to go along with the 2004 decision, and that the fault lies in the obscurity of the Commission’s ruling.

“This is not about compliance, this is about clarity,” said Brad Smith, a member of Microsoft’s general counsel. “We do not believe this fine is justified…We have great respect for the Commission and this process, but we do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission’s original decision and our good-faith efforts over the past two years.” Microsoft has said it will appeal.

Ms. Kroes said that these new fines send a message to every company doing business in the EU that “they must follow EU law.”

Source: BBC; The New York Times

http://news.bbc.co.uk/1/hi/business/5171126.stm