Microsoft appeals $350M European fine

IDG News Service - BRUSSELS -- Microsoft Corp. yesterday filed an appeal of a fine that the European Commission imposed on the company in July for failing to comply with the EC's 2004 antitrust ruling.

Tom Brookes, Microsoft's spokesman in Brussels, said on Tuesday that the company had filed the appeal in the European Court of First Instance in Luxembourg, following through on a plan it announced after the fine was imposed.

The EC fined Microsoft €280.5 million ($357 million U.S.), saying that the software vendor had failed to submit adequate information about its operating system protocols for sharing with competitors. Neelie Kroes, the European commissioner in charge of competition, said in July that the documentation submitted by Microsoft "fell significantly short of what was required."

The Court of First Instance is already considering Microsoft's appeal of the 2004 ruling itself, which also ordered the company to sell a version of Windows in Europe without its media player software and included a separate fine of almost €500 million ($637 million). The court is expected to rule on the first appeal late this year or in the first half of 2007.

Despite that appeal, Microsoft has claimed from the beginning that it is committed to honoring the antitrust ruling. The company paid the initial fine promptly, and it has offered an alternate version of Windows XP without Windows Media Player, although sales of that release have been almost nonexistent.

In addition, Microsoft submitted new information about its Windows protocol to the EC shortly after the noncompliance fine was imposed in July. The commission is still studying the new documentation, but Kroes has said she is confident that Microsoft's "foot-dragging" is over. "They are making constructive efforts now," she said. "It's a shame they didn't do so two years ago."

The €280.5 million fine was calculated using a daily fine of €1.5 million from Dec. 16 of last year to June 20, the day on which Microsoft began making a more concerted effort to comply with the documentation mandate, according to the EC.

Meanwhile, European antitrust officials have been busy studying Windows Vista, the next version of its client operating system, which is scheduled to go on sale later this year for corporate users and in early 2007 for consumers. EC officials are concerned that some new features in Windows Vista may run afoul of the same antitrust laws that formed the backbone of the 2004 ruling, and Microsoft has warned that the software's launch in Europe could be delayed due to regulatory problems.