The European Commission is considering taking further action against Microsoft for its continued failure to comply with antitrust sanctions, including ‘structural,’ rather than behavioral remedies, according to competition commissioner Neelie Kroes.
In 50 years of EU antitrust policy we have never before encountered a company that has refused to comply with a Commission decision, Kroes told the American Bar Association last week, according to Reuters, quoting a transcript of her speech.
It could be reasonable to draw the conclusion that behavioral remedies are ineffective and that a structural remedy is warranted, she reportedly added.
Kroes’s speech came on the eve of Microsoft’s latest deadline to respond to the competition commission’s statement of objections to the royalty fees it is charging to gain access to information that would allow rival systems to interoperate with Windows.
In March the competition commission said Microsoft was asking for unreasonable royalty fees and threatened the company with a potential 3m euro ($4m) per day fine.
Microsoft met the deadline to respond with a request for greater clarity on what prices the Commission wants us to charge according to a statement from Brad Smith, Microsoft’s general counsel, although the company also noted that it has not requested an oral hearing – preferring instead to try to resolve the issue via a constructive conversation.
In a statement, the European Commission said it would now consider Microsoft’s reply and decide whether to impose a daily penalty on Microsoft for failure to comply with the March 2004 decision.
It remains to be seen how the competition commission will respond to Microsoft request for pricing guidance, but it is unlikely to be amused given that Microsoft previously challenged the Commission’s right to regulate intellectual property pricing on a global basis.
The company was fined 280.5m euros ($369.5m) in July 2006 for failing to comply with the Commission’s 2004 antitrust ruling and was threatened with increased fines if it failed to provide complete information regarding its interoperability protocols by November 23.
Microsoft met that deadline and has supplied 1,500 pages of submissions since December 2005 but has failed to convince the EC that its protocols represent significant innovation for which it would be able to charge a non-nominal fee.
Microsoft is currently appealing against Commission’s 280.5m euro fine, as well as the initial 497.2m euro ($654.9m) fine delivered after it was found guilty of breaking European Union competition law in March 2004. Separately, it is also appealing demands that it should have to share the interoperability information with open source rivals.
It appears that the impact of the numerous appeals has been to try the patience of Kroes and the competition commission, although it is not clear what structural remedies would be at the commission’s disposal. The commission had not responded to a request for clarification or for a copy of Kroes’s speech to the American Bar Association by press time.
In 2000 US Judge Thomas Penfield Jackson ordered that Microsoft should be broken up into smaller companies following his findings that the company had illegally abused its monopoly position. That order was later overturned on appeal, however.