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European regulator fines Microsoft $1.35 billion

By MarketWatch
Last update: 9:53 a.m. EST Feb. 27, 2008Print E-mail RSS Disable Live Quotes

LONDON (MarketWatch) -- The European Commission on Wednesday announced $1.35 billion in fines against Microsoft Corp., stemming from a years-long struggle with the software giant over allowing rivals access to its technology.

Wednesday's penalty of $1.35 billion (899 million euros) comes on top of earlier fines in the case totaling about $1.17 billion (780 million euros), making the overall cost of the case higher than Microsoft's latest estimates.

Microsoft said in a Jan. 24 regulatory filing that it could face fines totaling as much as 1.5 billion euros related to the dispute.

Microsoft (MSFT:Microsoft Corporation
Last: 28.27-0.11-0.38%

10:08am 02/27/2008

MSFT 28.27, -0.11, -0.4%) shares showed litted effect from the EC fine, rising 2 cents to $28.40 in early trading Wednesday.

The European Commission in 2004 ordered Microsoft to grant competitors access to its technology "protocols" at a reasonable price, so they could develop compatible products.

The commission subsequently fined Microsoft twice for not sufficiently complying with that order. Microsoft meanwhile appealed to a European appeals court, which ruled against it in September.

Microsoft abandoned its fight against the commission in October, and said it would agree to the changes the commission demanded. The commission responded by halting penalties against the company. See related story.
"Talk is cheap; flouting the rules is expensive," Neelie Kroes, European commissioner for competition policy, said in a statement. "Microsoft continued to abuse its powerful market position after the Commission's March 2004 decision requiring it to change its practices."

Last week, Microsoft announced that it will make information about its products more easily available to outside programmers, in response to continued scrutiny of its competitive behavior.
That marks a reversal for the Redmond, Wash. company, which has historically sought to limit such access. See related story.

Kroes appeared skeptical of that move. "A press release, such as that issued by Microsoft last week on interoperability principles does not necessarily equal a change in a business practice," Kroes said in the statement announcing the fines.

The European Commission is pursuing two separate antitrust probes of Microsoft, announced in January. One relates to the company's dominant Office suite of software tools, and the other to its Internet browser technology. Kroes said that both investigations are continuing, but that no conclusions have been reached.

In addition, Microsoft recently acknowledged that the commission is also looking into lobbying efforts for its Open XML file format, which has been derided by critics as insufficiently accessible. Microsoft unsuccessfully sought last year to receive approval from the International Organization for Standardization, or ISO, to have Open XML declared an international standard.

Currently, ISO delegates are meeting in Geneva to discuss changes necessary for Open XML, before it receives a second vote by ISO members later this year.

File formats serve as digital containers for files such as Word documents, and are used to store, transfer and open them on different computers.

John Letzing contributed to this article. ry.aspx?guid=%7B4421D497%2DDECC%2D41BF%2D9C86%2DE4C815C25241%7D&siteid=yhoof

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