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Microsoft is likely to be fined

Microsoft Corp., the world's largest software maker, will probably be fined next week for failing to comply with an antitrust order, European Union Competition Commissioner Neelie Kroes said. “I couldn't imagine another way,'' Kroes told reporters in Berlin, when asked whether EU regulators would penalize the company. She declined to say how much the fine might be. Competitors and regulators say Microsoft, whose products run on about 95% of all personal computers, resisted complying with a March 2004 order to license information to rivals on how Windows communicates over a network. The fines, which the European Commission has said would be backdated to Dec. 15, may reach hundreds of millions of euros. Regulators from the EU's member states voted on July 3 to support the commission's plan to fine Microsoft as much as € 2 million ($2.5 million) a day for failing to comply, three people with knowledge of the closed-door meeting said at the time. The commission, the EU's antitrust authority, says failure to provide the information hinders competition in the market. Microsoft listed almost $4.4 billion in cash on hand and about $30.5 billion in short-term investments on its balance sheet as of March 31. The additional fines the company may face might top $522 million as of July 12, at the maximum daily rate. Representatives of the 25-member EU will meet again on July 10 to decide how much to fine Microsoft, the people said. A final decision by the commission will be made July 12. Kroes will hold a press conference on that day, commission spokesman Jonathan Todd said by telephone. “We believe fines to be unjustified and unnecessary,'' Horacio Gutierrez, Redmond, Washington-based Microsoft's associate general counsel, said in an e-mail to employees last week. Microsoft shares rose 13 cents to $23.48 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The shares have declined 13% since Dec. 15. The penalty will come on top of the € 497 million already levied on the company in the 2004 decision by Mario Monti, the competition commissioner at the time. Microsoft was also ordered to sell a cut-down version of Windows without a video and music player. It has appealed the decision to the European Court of First Instance in Luxembourg. Kroes said today that there was already a consensus to impose additional fines and that the decision should be taken next week. “It's on the agenda,'' which usually means that “there will be a decision,'' she said. Kroes said the size of the company made no difference for assessing the case. “If people don't conform to our rules, then it needs to be corrected,'' Kroes said. (Bloomberg)