Microsoft Asks EU How Much To Charge Rivals
Microsoft responded Monday to European Union allegations that it is overcharging
rivals for information that would make their products work better with Windows.
The software maker also repeated its request for more guidance on what regulators
consider to be an acceptable price.
To level the software industry's playing field, EU officials want Microsoft's
rivals to have access at a "reasonable cost" to material that would
help their programs interoperate with Windows-based servers. Regulators have
called the current prices excessive and the Microsoft's information insufficient.
The EU had given Microsoft until Monday night to come through with a response
on the fees it seeks from competitors to share computer information, and threatened
daily fines that could go as high as $4 million a day. It said it will consider
the company's reply and decide whether to impose a daily penalty.
Microsoft declined to provide details about the company's response.
Microsoft previously said the prices it charges are fair and that the EU has
failed to provide clear guidance.
Also Monday, Microsoft declined the opportunity to have a hearing with the
Commission on the EU's Statement of Objections.
"We need greater clarity on what prices the [European] Commission wants
us to charge, and we believe that is more likely to come from a constructive
conversation than from a formal hearing," said Brad Smith, Microsoft's
Microsoft's license program sets a maximum 5.95 percent royalty rate for products
that use its server protocols and the company has said it believes the prices
reflect the code's value. It claims the Commission wants it to license the technology
to competitors for free.
On March 1, the EU's executive arm said there was "no significant innovation"
in the requested information Microsoft had to provide rivals -- and therefore
Microsoft did not have the right to charge high fees for licenses.
Microsoft has complained that the treatment it receives from the 27-nation
EU is unmatched around the world and hurt Europe's efforts to become a thriving
In a landmark 2004 ruling, EU regulators found the company broke competition
laws and abused its dominant market position.
Besides a record $674 million fine it imposed at the time of the ruling, the
EU levied a $380 million fine last summer, saying Microsoft did not supply --
as demanded -- complete interoperability documentation.
In the meantime, Microsoft has reached licensing agreements with several of
the companies that originally took issue with the software maker's practices
and pricing, including Sun Microsystems Inc. and Novell Inc.
Microsoft has appealed the original 2004 ruling and a court decision is expected
Shares of Microsoft fell 30 cents $28.72 in Monday afternoon trading on the
Nasdaq Stock Market.