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2/28/08

Businessweek: The EU's New Heat on Microsoft - by Jennifer L. Schenker

The EU's New Heat on Microsoft

The EU's New Heat on Microsoft - by Jennifer L. Schenker

Will Microsoft's struggle with the European Union's antitrust watchdog never end? The announcement Feb. 27 that the European Commission is slapping more than $1.3 billion in new fines on the software maker (MFST) is the clearest signal yet that the battle between Redmond and Brussels is far from over. This time, the commission is again penalizing the company for failing to comply with a 2004 order to reduce what it charges rivals for access to the information they need to make their products work better with Microsoft's market-dominant software. Combined with earlier fines against the software giant totaling more than $600 million, the EU has now fined Microsoft nearly $2 billion in a clash that began nearly decade ago and culminated with a landmark court case in September. The new European investigations come as Microsoft finds itself in danger of seeing EU governments effectively ban its software to create documents. The European Commission and its member states have been mulling a mandate that all government documents be created in the Open Document Format (ODF), an open source competitor to the proprietary format used in Microsoft Word.Microsoft's attempts to push its own new document format—which it claims is open and critics say is not—is coming under the scrutiny of antitrust authorities in Brussels and could lead to yet another legal showdown.

Note EU-Digest: "Microsoft was the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," Competition Commissioner Neelie Kroes said in a statement. For years after the decision Microsoft said it was making every effort to comply with the Commission's orders. "Talk is cheap, flouting the rules is expensive," Kroes said. "We don't want talk and promises. We want compliance." Good job Mrs. Neelie Kroes, not only Microsoft competitors but also European consumers will benefit.

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