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Thursday, February 09, 2006
EU Commission Denies Microsoft Deadline Extension


Microsoft lost a bid on Wednesday for a second delay in responding to charges it failed to comply with European antitrust remedies, moving it one step closer to a fine of up to 2 million euros ($2.4 million) daily.

An independent European Commission hearing officer also turned down the U.S. software giant's request for access to correspondence involving technical experts, which it wanted for its defense.

"We have confirmed the deadline of February 15 on the basis that nearly eight weeks should be sufficient for Microsoft to reply to a comparatively short statement of objections," Commission spokesman Jonathan Todd told http://www.reuters.com.

Todd said the hearing officer had given Microsoft access to some third-party correspondence, because the people involved had waived their right to confidentiality.

In a quick response, Microsoft focused on the denial of access to correspondence between the Commission, a monitoring trustee and other technical experts.

"The Commission's position on this point is contrary to both the letter and spirit of the law," wrote Ian Forrester, a Microsoft lawyer, to Hearing Officer Karen Williams.

Earlier, Microsoft Europe's associate general counsel, Horacio Gutierrez, said: "The Commission cannot unilaterally take away a fundamental right of defense."

The Commission's Todd said the hearing officer found no such compromises of Microsoft's rights.

"In contrast to Microsoft's claims, the hearing officer considers that Microsoft's rights of defense have been properly safeguarded," he said.

The Commission found in November that Microsoft had so far failed to comply with remedies contained in a landmark 2004 antitrust decision against it.

Under that 2004 decision, the Commission also fined the company 497 million euros, which it has paid.

The Commission ordered the firm to provide workable instructions that would let competitors develop server software -- for functions such as managing printers -- that worked with Microsoft's Windows operating system as well as Microsoft's programmes did.

Instead, the independent trustee found the documentation supplied by Microsoft "fundamentally flawed in its conception."

The Commission gave Microsoft until December 15 to comply with the remedy or face a new daily fine.

That deadline passed, so the Commission opened new proceedings to impose a daily fine, based in part on the findings of the trustee, who was chosen by the Commission from several candidates nominated by Microsoft.

But Microsoft says the trustee and the technical advisers cannot be considered as both independent and experts for the Commission.

"The Commission cannot simultaneously claim that a trustee is its own expert, with whom all exchanges are 'internal', and that he is an independent source of authority," Microsoft's Forrester wrote to the hearing officer.

But the Commission said Microsoft's argument came too late.

"They should have challenged the decision nominating him, which outlined the terms and conditions of his relationship with the Commission," Commission spokesman Todd said.

Beyond that, he said, "If they were to consider the trustee's conclusions to be wrong, they are in any case in a position to prove them wrong. They don't need to know whether, for example, he was influenced in some way by the Commission."

Todd said the trustee relationship was like that used in merger cases when correspondence between the Commission and the trustee was always confidential.


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