Microsoft appeals 899 million euro "late fee" in EU

Microsoft announced on Friday that it has filed an appeal with the Court of First Instance in Luxembourg, contesting the antitrust fine demanded by the European Commision in February.

The landmark 899 million euro fine was the culmination of the European Commission's 2004 decision to require Microsoft to change its practices for the sake of fair competition in the EU. The Commission previously fined Microsoft €497 million for bundling Media Player into Windows, and not providing adequate Windows protocol interoperability information to open source developers.

Microsoft amended its practices surrounding this issue, but incurred an additional fine for the period of time ending in October 2007, when a license for the information cost a flat fee of €10,000. The total due for the daily "late fee" applied by the EU Commission came to 899 million euros, or $1.35 billion.

In March 2007, Microsoft Senior Vice President and General Counsel Brad Smith said, "We believe we have been fair in setting proposed protocol prices, and an analysis by PricewaterhouseCoopers found that our proposed prices were at least 30 percent below the market rate for comparable technology."

EU Commissioner Neelie Kroes summarized the ruling by saying, "Charging such an unreasonable price effectively rendered the offer of the information pointless."

It is the fine for this infraction that Microsoft is appealing. In a statement to the press, Microsoft spokesman Jack Evans said, "We are filing this appeal in a constructive effort to seek clarity from the Court."

The company recently revealed changes to its policy for third party access to Microsoft's protocols, and has shown a public "change of heart" toward third party interoperability. It's quite possible the nearly $2.6 billion in fines the EU has levied against Microsoft has something to do with that shift.