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The European Commission has issued formal charges against Microsoft for failing to comply with its antitrust ruling from March 2004, and warned the US group it could face financial penalties early in the new year.

The warning marks a significant escalation in the long-running antitrust battle between Microsoft and the Commission, and highlights the regulator’s exasperation with the behaviour of the software group. It is the first time the European Union’s top antitrust regulator has charged a company for failing to comply with one of its rulings.

The move comes 21 months after the Commission found that Microsoft broke EU competition rules by abusing its dominant position in the market for computer operating systems. The group has five weeks to implement the remedies contained in the ruling.

Brussels’ impatience was illustrated by on Thursday’s assessment of the group’s compliance. The regulator said Microsoft had only supplied “incomplete and inaccurate” information on its Windows operating system. Microsoft had therefore failed to implement one of the core elements of the Commission’s 2004 ruling, which also imposed a record €497m ($587m) fine on the group.

Neelie Kroes, EU competition commissioner, said in a statement: “I have given Microsoft every opportunity to comply with its obligations. However, I have been left with no alternative other than to proceed via the formal route to ensure Microsoft’s compliance.”

Microsoft described the regulator’s statement as “unjustified”. Brad Smith, the group’s general counsel, said: “We continue working quickly to meet the Commission’s new and changing demands. Yet every time we make a change, we find that the Commission moves the goal post and demands another change.”

Failure to meet the Commission’s demands is likely to result in financial penalties that could reach €2m a day. However, the penalty will start at a lower level because Microsoft would also have to be judged to have failed in other duties for the Commission to impose the maximum.

The regulator’s central accusation is linked to Brussels’ demand that Microsoft reveal to rivals information about the workings of its Windows operating system. The order is intended to ensure that other companies can design server software that works smoothly with Windows-driven computers.

The Commission said the group’s disclosure had fallen short of expectations, citing reports from its technical advisor, or monitoring trustee. The trustee argued that “the process of using [Microsoft’s] documentation is an absolutely frustrating, time-consuming and ultimately fruitless task”.

Microsoft insisted that neither the Commission nor its advisor had studied the group’s latest proposal on the matter, which was filed last week.

The Commission’s move was welcomed by Microsoft’s rivals.

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