[IP] EU tough stance on Microsoft even impresses the Americans
Begin forwarded message:
From: James Love <james.love@xxxxxxxxxx>
Date: July 9, 2006 7:29:14 PM EDT
To: Dave Farber <dave@xxxxxxxxxx>
Subject: EU tough stance on Microsoft even impresses the Americans
Date: July 9, 2006 5:42:13 PM EDT
Subject: EU tough stance on Microsoft even impresses the Americans
EU tough stance, fine prompt movement by Microsoft
Stance impreses Americans
Sun Jul 9, 2006 8:36 AM ET
By David Lawsky
BRUSSELS, July 9 (Reuters) - The European Commission is due to fine
Microsoft on Wednesday as part of a hard-line approach towards
getting the software giant to comply with antitrust sanctions that
appears to be bearing fruit.
The extent of Microsoft's <MSFT.O> new-found cooperation in the face
of a penalty that is likely to reach hundreds of millions of euros is
impressing even the Americans, until now highly critical of Brussels'
approach.
U.S. Justice Department lawyer Renata Hesse conceded in May that the
American approach -- which has not relied on coercion -- had failed
to accomplish as much in five years, more than twice the time since
Europe in 2004 ruled the firm was exploiting a near-monopoly.
"They're obviously further along at this point than we are," Hesse
told a U.S court in reference to the European method.
For the European Union executive, the policy is quite clear.
"If people are not ... conforming (with) our regulations, our rules,
then it needs to be corrected," EU Competition Commissioner Neelie
Kroes said late last week. She said she could not imagine that
Microsoft would avoid a fine when the Commission met this week.
The European Commission will reveal on Wednesday the size of its
fine. It will be set at up to 2 million euros ($2.6 million) a day,
backdated to Dec. 15, 2005 and extending to some time before
Wednesday. The fine's dimensions will be endorsed in a closed meeting
of the 25 EU countries on Monday.
Brussels' tough new penalty is on top of 497 million euros in fines
the Commission already imposed in its landmark antitrust decision
against Microsoft in March 2004.
After years of investigation, the Commission found that Microsoft
used near-monopoly power from its Windows operating system to harm
competitors making "work group servers", which run printing and sign-
on services in offices.
The Commission ordered Microsoft to give rivals the information
needed so their work group servers could compete on a level playing
field with Microsoft's own. Microsoft must help its rivals
interconnect smoothly with Windows.
Microsoft was supposed to ready the information for competitors by
June 2004. The company tried to have the sanctions suspended until it
could complete a court challenge to the 2004 decision, but late that
year a judge said no.
In the Commission's view, Microsoft moved too slowly. Finally it
threatened the software giant with daily fines in December 2005, and
within months Microsoft agreed on a plan.
A Microsoft spokesman rejected the idea that the company had dragged
its feet.
"Microsoft has done everything that the Commission has ever asked of
it," he said.
FASTER THAN AMERICA
With the Brussels fine hanging over its head, Microsoft and the
Commission's "monitoring trustee" agreed in April on a schedule for
the documentation needed for work group servers. Microsoft said it
had not understood until then what the Commission wanted.
Suddenly, things were moving faster than in the United States.
"The monitoring trustee and Microsoft have, for example, agreed on a
specification for the documentation in Europe, and our technical
folks and Microsoft are just now doing that," the Justice
Department's Hesse told a U.S. judge in May.
A U.S. judge found in 2000 that Microsoft had broken the law and
imposed sanctions, including a break-up of the company. An appeals
court threw out that remedy but left the most serious legal
violations intact.
Once President George W. Bush took over, his Justice Department
reached a settlement with Microsoft that former Clinton Justice
Department officials believed would be ineffective.
By May of this year the American process was so troubled that
Microsoft and the court started over again in a so-called "reset",
taking a cue from what U.S. District Judge Colleen Kollar-Kotelly
called "the European Commission's direction".
Microsoft says it never delayed carrying out Commission sanctions and
first offered a proposed draft for interconnection software and
documentation in 2004.
But the Commission's monitoring trustee found Microsoft's approach
"fundamentally flawed".
The Microsoft project to comply with the Brussels sanctions has a
colourful, placed-based name typical of those used by the software
giant: Project Circle Line, named after the London underground train
line.
The company says it involves the intense efforts of 300 people and
the last stage, known as Paddington -- one of the stops on the London
Circle Line -- will be finished on July 18.
If Microsoft's work meets Commission standards there may be no more
fines.
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