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Originally published April 21, 2007 at 12:00 AM | Page modified April 21, 2007 at 2:01 AM

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Microsoft dispute a lesson, EU says

Microsoft's refusal to obey a 2004 order that it share software data with rivals may prompt European authorities to consider harsher remedies...

Bloomberg News

Microsoft's refusal to obey a 2004 order that it share software data with rivals may prompt European authorities to consider harsher remedies in future antitrust cases, Europe's chief competition enforcer told U.S. lawyers.

The lengthy legal fight with Microsoft has taught officials that more drastic remedies such as a breakup may be needed for companies that continue to abuse their market dominance, Neelie Kroes, the European Commission's competition commissioner, told a conference in Washington, D.C., on Friday.

Microsoft is appealing a 497-million-euro ($675 million) fine levied in 2004 for abusing its Windows monopoly for personal computer operating software by squelching competition for computer servers. Last month, European Union regulators threatened Microsoft with fines for charging "unreasonable" licensing fees for data needed by software rivals.

"We have never, ever before encountered a company that has refused to comply with commission decisions," Kroes said. "We learned we may have to look for a more effective remedy."

Kroes spoke at a panel discussion with U.S. antitrust enforcers, who have said the commission's actions against Microsoft were based on faulty economic principles. The discussion was sponsored by the American Bar Association.

"We have done everything humanly possible to comply with a decision that is unfortunately very unclear and undefined, and we will continue to work with the commission in every way that we can," Microsoft spokesman Guy Esnouf said in an e-mailed statement.

In 2001, the U.S. Justice Department negotiated a settlement with Microsoft after an appeals court upheld findings that the world's largest software maker had illegally protected its Windows monopoly.

The appeals court also overturned a trial judge's order breaking up Microsoft.

Subsequently, the European Commission, acting on complaints by Sun Microsystems, America Online and other U.S. companies, ordered Microsoft to share software data that rivals need to write server programs that work well with the Windows PC operating system.

The commission, the European Union's antitrust arm in Brussels, began investigating Microsoft after a complaint filed by Sun in 1998.

Last July, the agency fined Microsoft 280.5 million euros ($381 million) for not complying with the March 2004 ruling.

Neither Thomas Barnett, the U.S. Justice Department's antitrust chief, nor Deborah Majoras, chairwoman of the U.S. Federal Trade Commission, responded to Kroes' remarks.

Separately, a Microsoft lawyer said Friday that there has been "no market acceptance" of another remedy ordered by the European Commission in 2004.

There is "literally zero" demand for a version of Windows stripped of a music and video player, which the company was ordered to offer customers in Europe, David Heiner, Microsoft's deputy general counsel, told a technology conference in New York.

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