Microsoft faces £332m EU antitrust fine

Microsoft faces a £332m fine from the European Commission tomorrow for abusing its monopoly in computer operating systems.

Microsoft faces a £332m fine from the European Commission tomorrow for abusing its monopoly in computer operating systems.

The fine, which was set late last week after settlement talks with Microsoft broke down, was backed by national competition regulators from the 15 EU member states.

Microsoft said the fine is too big. "In view of the absence of a clear legal standard under EU law, a fine of this size isn't warranted," said Tom Brookes, the company's spokesman in Brussels.

The fine will be discussed today by senior aides to all 20 commissioners before being brought up at the commission's final meeting on the case tomorrow.

Microsoft would then be informed of the fine officially and sent a summary of the ruling by fax, shortly before Mario Monti, competition commissioner, holds a press conference to announce the decision.

People close to Microsoft were speculating over the weekend that the commission would not issue any fine at all.

''In previous antitrust cases, the commission has waived a fine in cases where the company involved didn't know it was breaking European antitrust law,'' the person said, adding, ''Microsoft could argue that it didn't know until now that its behaviour broke the rules.''

''We have already told Microsoft many times that a negative ruling will incur a fine,'' said Monti's spokeswoman, Amelia Torres. ''A small company could claim it didn't know the rules but not one the size of Microsoft.''

The commission is expected to rule on Wednesday that Microsoft abused the monopoly position of its Windows operating system twice. By withholding vital information about Windows from makers of software for servers, the firm gained an unfair advantage over them in the market for server software; it also competed unfairly by bundling its Media Player software into Windows, the ruling is expected to find.

The commission is expected to announce remedies to restore competition in these markets, requiring Microsoft to sell two versions of Windows to PC makers in Europe, one of them with Media Player stripped out.

It would also have to share more secret Windows code to allow rival server software makers to compete with Microsoft server software more fairly.

Some analysts said these remedies are more important than the fine in terms of making an impact on Microsoft, because the company has more than $50bn in cash reserves and has already set some of that aside for covering legal costs.

After negotiations toward a settlement of the charges collapsed last week, Microsoft's chief counsel, Brad Smith, said the company would appeal against any ruling at the European Court of First Instance.

Paul Meller writes for IDG News Service

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