BRUSSELS: The European Commission fined Microsoft Corp a record $1.35 billion yesterday for defying sanctions imposed on the software giant for antitrust violations, far exceeding the original penalty.

The commission, executive arm of the European Union, has now fined Microsoft $2.52 billion for its original violation and for failing to comply with sanctions, more than any other firm. It said no other company had ever ignored sanctions.

"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," Competition Commissioner Neelie Kroes said in a statement.

The company said in a statement that the fines concerned "past issues" and it was now looking to the future.

EU regulators said the company charged "unreasonable prices" until last October to software developers who wanted to make products compatible with the Windows desktop operating system.

Microsoft said it was now working under new principles to make its products more open.

But Kroes warned that the company was under investigation on two other separate cases. She was skeptical over license changes the company announced last week, saying: "Talk is cheap. Flouting the rules is expensive."

Microsoft's actions stifled innovation, hurting millions of people who use computers in offices around the world, she said, calling the fine "a reasonable response to a series of quite unreasonable actions".

Microsoft fought hard against a March 2004 decision that fined it $746 million and ordered it to share inter-operability information with rivals within 120 days, taking an appeal to an EU court that it lost last September.

It was fined again in July 2006 - $420 million - for failing to obey that order.

The EU alleged that Microsoft withheld crucial inter-operability information for desktop PC software - where it is the world's leading supplier - to squeeze into a new market and damage rivals that make programs for workgroup servers that help office computers connect to each other and to printers and faxes.

The company delayed complying with the EU order for three years, the EU said, only making changes on Oct 22 last year to the patent licenses it charges companies that need data to help them make software that works with Microsoft.

Microsoft had initially set a royalty rate of 3.87 percent of a licensee's product revenues for patents and demanded that companies looking for communication information - which it said was highly secret - pay 2.98 percent of their products' revenues.

The EU complained last March that these rates were unfair.

Under threat of fines, Microsoft two months later reduced the patent rate to 0.7 percent and the information license to 0.5 percent - but only in Europe, leaving the worldwide rates unchanged.

The EU's Court of First Instance ruling that upheld regulators' views changed the company's mind again in October when it offered a new license for inter-operability information for a flat fee of $14,900 and an optional worldwide patent license for a reduced royalty of 0.4 percent.

Agencies

(China Daily 02/28/2008 page1)