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EU Slams Microsoft With Record $1.35 Billion Fine

Penalty for overcharging rivals for access to Windows OS protocols brings software giant's total anti-trust bill in Europe to nearly $2.5 billion.

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The fine, the largest single penalty ever levied against one company by the EU for anti-competitive practices, brings Microsoft's total bill for the landmark 2004 decision and later non-compliance rulings to nearly $2.5 billion. That figure includes the $723 million Microsoft was fined as result of the original EC decision and an additional $416.5 million in later penalties for non-compliance with orders to open key portions of its software to competitors trying to build compatible products.

The latest fine, associated with Redmond, Wash.-based Microsoft's overcharging open-source developers for Windows server operating system communications protocols, was the summation of daily fines accrued from June 21, 2006 to October 21, 2007. Microsoft, which can appeal Wednesday's fine, fought the original 2004 ruling for years but appeared contrite after its appeal efforts ran aground with a ruling against the company by the European Court of First Instance last September.

"It's clearly very important to us as a company that we comply with our obligations under European law. We'll study this decision carefully, and if there are additional steps that we need to take in order to comply with it, we will take them," Microsoft's general counsel Brad Smith said immediately following the Court of First Instance ruling.

Microsoft contends that the dating of Wednesday's accumulation of daily fines to about a month following that ruling indicates that it has taken the promised additional steps towards compliance.

"The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved," the company said in a statement Wednesday.

European Competition Commissioner Neelie Kroes was less sunny in her assessment of the situation Wednesday, but also seemed to indicate that Microsoft may have put most of its European anti-trust problems in the rear-view mirror.

"Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision. I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance," Kroes said in a statement from Brussels.

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