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EU to Announce Heavy Fine for Microsoft: Sources

Carolina Cimenti,|Brussels News Coordinator
Wednesday, 27 Feb 2008 | 4:44 AM ET

The European Commission will announce later Wednesday that it will fine Microsoft for failing to comply with a 2004 antitrust order, sources close to the EC told CNBC Europe, saying the fine may be as high as 1 billion euros ($1.5 billion.)

Microsoft
Microsoft

Competition Commissioner Neelie Kroes is likely to make the announcement at around 10:30 GMT, the sources said.

The final value of the fine was not clear, as in theory the Commission could apply the biggest fine ever, of 3 million euros per day since a non-compliance order was sent.

This would bring the total to around $2 billion, while Microsoft itself estimated last month that the fine would be around $1.5 billion.

Last week, the software giant announced it would open up its systems more, giving away documentation and computer code needed to make outside applications work together with Office, Windows and others. In the past, Microsoft charged for this information.

But the European Union’s response to Microsoft’s announcement was lukewarm, saying the monopoly failed to address antitrust issues in the past.

“Reasonable” Fees

The 2004 antitrust order asked Microsoft to charge “reasonable” fees for patent licenses on operating systems software.

At the time, after a five-year investigation, the Commission concluded that Microsoft had abused its share of the operating systems market for PCs because of its Windows program.

It said Microsoft was using its strong grip on the operating systems market to squeeze rivals out of the more competitive markets for media players, slapping a fine of 497 million euros, which was then a record.

In July 2006, the EC fined Microsoft another 280 million euros. Last year, the European Commission sent Microsoft a new warning concerning the lack of compliance with the order.

Microsoft shares were trading 1.2 percent lower in Frankfurt.

-- Written by CNBC.com

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