The EU fined Microsoft Corp. $357 million on Wednesday and threatened more penalties, saying the company failed to obey a 2004 antitrust order to share technical information that would allow rivals' software to communicate better with Windows.
Microsoft said it would appeal the fine, which was set at 280.5 million euros, claiming the hefty amount was unfair. Its shares fell 36 cents, or 1.6 percent, to $22.74 in early trading on the Nasdaq.
The European Union also said it would double fine rates to 3 million euros a day -- or $3.82 million, at current exchange rates -- starting July 31 unless the company supplies "complete and accurate" technical information to help rivals make software that works smoothly with its ubiquitous Windows operating system.
"Microsoft has still not put an end to its illegal conduct," said EU Competition Commissioner Neelie Kroes. "I have no alternative but to levy penalty payments for this continued compliance. No company is above the law."
Microsoft General Counsel Brad Smith said the company would ask the EU's second highest court, the Court of First Instance, if its compliance efforts have been sufficient, claiming the EU had never been clear about what it wanted.
"We have great respect for the Commission and this process, but we do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission's original decision and our good-faith efforts over the past two years," he said in a prepared statement.
The EU imposed daily fines of 1.5 million euros ($1.91 million) after a Dec. 15 deadline to June 20, when it decided that Microsoft was still violating EU law. In comparison, Microsoft earned $2.98 billion in the quarter ended March 31 on revenue of $10.9 billion.It has three months to pay Wednesday's fine.
The EU already had levied a record 497 million euro fine on Microsoft in 2004 and ordered it to hand over communications code to rivals, saying it had deliberately tried to cripple them as it won control of the market.
Kroes also said Wednesday she warned Microsoft it had to take care to avoid antitrust problems with its new operating system Vista, which will include an Internet search and a PDF-type document reader that could pose problems for current rivals.
Smith said Microsoft had put forward four options for the way it could offer Vista in Europe. One would see it withdraw technology similar to the PDF file reader made by Adobe Inc., he said. The Commission has so far not responded.
