July 10, 2006 8:16 pm

Microsoft faces big jump in antitrust fines

The European Commission will on Tuesday further increase the financial pain for Microsoft in their long-running antitrust dispute by raising the ceiling for potential future fines to €3m-a-day, according to people familiar with the case.

This is an increase from the current €2m-a-day fines which the Commission will impose on the US software group for failing to comply with an earlier Brussels ruling.

That fine, for the period of non-compliance starting December 15 2005 could be announced on Tuesday. It is likely to run to hundreds of millions of euros.

Raising the ceiling for daily fines to €3m-a-day leaves room for even harsher penalties in the future. Under European Union competition rules companies that fail to comply with a Commission ruling can be fined up to 5 per cent of their daily worldwide turnover.

In Microsoft’s case this would be about $5.5m-a-day.

The Commission on Monday declined to comment.

At the heart of the current dispute is the Commission’s allegation that Microsoft had failed to draw up “complete and accurate” technical information about its flagship product, the Windows desktop operating system. Under the terms of the 2004 ruling, that information has to be made available to rival companies so they can design server software compatible with Windows.

Microsoft insists that it has done enough to satisfy the ruling.

It will be the first company to be fined for failing to implement a Commission antitrust decision.

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