The European Commission has denied that it has deprived Microsoft of due process in defending itself against a threatened $2.4m daily antitrust fine, and warned Microsoft the fine could increase if it continues to fail to provide competitors with adequate technical documentation.
Microsoft recently filed its formal response to a potential $2.4m daily antitrust fine after the Commission decided in late 2005 that the company had not fully complied with the technical documentation requirements that were imposed by the EC after Microsoft was found guilty of breaking European Union competition law in March 2004.
In doing so Microsoft repeated earlier claims that the Commission has denied it due process and asserted that when the Commission issued its Statement of Objections on 21 December 2005, the Commission and its experts had not even bothered to read the most recent version of those documents which Microsoft had made available on 15 December 2005.
The Competition Commission has maintained that it is fully committed to guarantee due process and countered Microsoft’s latest claim. In fact this documentation was actually supplied on 26 December to the Commission, 11 days after the 15 December deadline and five days after the Statement of Objections was sent, the Commission stated in a response to Microsoft’s filing.
As Microsoft’s general counsel had announced in a letter of 15 December 2005 this new technical documentation indeed addressed only ‘formatting issues’ raised by the monitoring trustee. It was therefore not substantially different from that which the Commission examined in the context of the Statement of Objections, it added.
Microsoft now has the right to an oral hearing, which will be organized by the hearing officer but is likely to take place in the coming weeks. The Commission noted that following the hearing and consultation with the Advisory Committee of Member State Competition Authorities, it may then issue a decision for non-compliance imposing daily fines on Microsoft backdated to 15 December 2005 and continuing until Microsoft becomes compliant.
If that is the case then Microsoft will already have built up a fine of more than $125m, and it could get worse. The Commission noted that in the case of continued non-compliance it could take further steps such as increasing the level of the daily fine.
The Commission also revealed that it is in the process of market testing Microsoft’s plans to license the relevant parts of its Windows source to developers and competitors in order to alleviate concerns over the technical documentation.
The US Department of Justice recently said the program satisfied its concerns about Microsoft’s technical documentation but the EC has reiterated its position that source code is not necessarily a solution.
Source code should at best complement the provision of complete and accurate specifications, in line with the Commission 2004 decision, it stated. The onus is on Microsoft to explain in their reply to the Statement of Objections precisely how and why the source code offer is relevant to ensuring their compliance with the March 2004 decision.