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Saturday, May 21, 2005
Microsoft may face EU fine process within weeks


Microsoft now has only weeks left until the European Commission decides whether to take steps toward fining it up to $5 million a day, a Commission spokesman said on Friday.

"Within a matter of weeks rather than months we will have to decide whether we are satisfied that they are complying with the remedies to our satisfaction," spokesman Jonathan Todd said.

"And if they're not, we'll have to decide whether we'll begin the proceedings to begin daily fines. But we have not reached that stage."

The Commission, which polices competition in the 25-nation European Union, fined the U.S. software giant a record 497 million euro ($654.9 million) on March 24, 2004, and ordered it to change the way it does business.

The decision required Microsoft to make its ubiquitous Windows operating system available without Windows Media Player, so computer makers could buy alternative software, to play films and music, from RealNetworks and Apple.

It also ordered the company to share information with rival makers of servers used to run printers and retrieve files, an issue known as interoperability. The company was supposed to propose a trustee to monitor its compliance.

Should the Commission decide that Microsoft has taken enough time to comply with the decision it can open a new procedure against the firm to fine it for non-compliance.

That would require a formal statement of objections, an advisory committee of EU states and, finally, a decision by the full 25-member European Commission.

But such a procedure could move very quickly, because there is very little which needs proving -- Microsoft so far has not met requirements that it comply with the remedies to the satisfaction of the Commission.

If the Commission moved quickly, it could complete work before its summer recess at the end of July.

The fine permitted is up to be up to 5 percent of a company's daily worldwide turnover.

The remedies would not affect Microsoft's appeal of the Commission's decision, which is before the EU's Court of First Instance in Luxembourg.

That court took another tiny step in the case on Friday, admitting the European Committee for Interoperable Systems, a business group, as a formal party in oral proceedings on the grounds that it has an interest in the outcome of the case.

That group includes companies such as IBM, Oracle, Nokia and Red Hat.


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