Report: Microsoft may face massive EU fine

The European Commission, the executive body of the European Union, is planning to hit Microsoft Corp. with a massive fine for antitrust violations, according to a report published Wednesday in The Wall Street Journal newspaper. Commission officials played down the report, refusing to comment on details of the investigation.

Citing a confidential Commission document outlining its case, the newspaper said the Commission alleges that “Microsoft misled investigators and sought to obstruct the case,” and as a result will impose the largest fine it can while demanding that Microsoft remove some features from its Windows software.

The allegations of attempting to mislead focus on a series of letters from customers which Microsoft supplied the Commission.

EU Commissioner for Competition Mario Monti refused to comment on the substance of the investigation, including details of the supposed misleading letters, when questioned at a regular news conference in Brussels on Wednesday morning.

Monti was dismissive of the newspaper’s claims for the magnitude of fine that may be imposed.

Under EU law, Microsoft can be fined up to 10 per cent of its annual revenue, or US$2.5 billion, the report said.

“To speak of fines when Microsoft has not even replied is premature. To enter this game of calculating a fine does no service to the public at large,” he said.

Microsoft has been given a little extra time to make its response to the case, Monti said.

In August, the EU confirmed that it had merged its two antitrust investigations into Microsoft Corp.’s operating systems, and was in the process of determining if Microsoft had violated European antitrust rules by “using illegal practices to extend its dominant position in the market for personal computer operating systems into the market for low-end server operating systems.”

The EU has charged that Microsoft has been actively attempting to dominate the corporate and Internet computer software market with its Windows and Office software while also attempting to put a stranglehold on competing software for operating music and video over the Web, all in violation of European antitrust laws.

Though initially Microsoft was tight-lipped about the matter, saying that EU investigations are confidential in nature and it was respecting that confidentiality, the company later responded to Monti’s comments.

“We can confirm that we have not done anything to violate antitrust laws or to mislead investigators,” a spokeswoman for Microsoft in the U.K. said.

“Microsoft welcomes the Commissioner’s statement this morning, that it is investigating where the leak of these confidential documents came from. As you know, the publication of a SO (statement of objection) is an intermediate step in the Commission’s process and not a final ruling on a company’s behaviour,” she said.

“Microsoft will respond to the SO in full and looks forward to continued dialogue with the Commission to resolve these issues,” the Microsoft spokeswoman said.

The report comes the day after the U.S. Supreme Court rejected Microsoft Corp.’s appeal to overturn a lower court’s ruling that the company violated antitrust laws.

The European Commission, in Brussels, is at

Microsoft, in Redmond, Wash., is at

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