The European Commission threatened to fine Microsoft ( MSFT) up to 2 million euros a day for failing to comply with an antitrust ruling from last year. At issue is the EC's requirement that Microsoft disclose interface documentation to allow non-Microsoft work group servers to achieve full interoperability with computers and servers running Microsoft's Windows operating system. The requirement was part of an EC antitrust ruling that Microsoft leveraged its near-monopoly in the PC operating system market into the markets for work group server operating systems and media players. "I have given Microsoft every opportunity to comply with its obligations," Competition Commissioner Neelie Kroes said in a statement. "However, I have been left with no alternative other than to proceed via the formal route to ensure Microsoft's compliance." In a statement Thursday, the EC said Microsoft has so far failed to provide interoperability information. In an earlier decision Nov. 10, the commission warned that if Microsoft didn't comply by Dec. 15, it could face the daily fines, which convert to up to $2.4 million a day. The commission said Microsoft has since revised the interoperability information but the commission has taken the "preliminary view" that the information is still incomplete and inaccurate. The EC said its decision was supported by Neil Barrett, a computer science expert advising the commission, who called Microsoft's documentation "totally unfit" and "fundamentally flawed in its conception." "Any programmer or programming team seeking to use the Technical Documentation for a real development exercise would be wholly and completely unable to proceed on the basis of the documentation," Barrett wrote in a report to the commission. "Overall, the process of using the documentation is an absolutely frustrating, time-consuming and ultimately fruitless task." Microsoft has five weeks to respond to the EC's so-called Statement of Objections and has a right to an oral hearing. The commission then can still issue a decision that backdates fines to Dec. 15.
Microsoft General Counsel Brad Smith responded by issuing a statement calling the EC's statement "unjustified" and said Microsoft will request a full oral hearing. "We are fully committed to comply with the decision," Smith said. He noted Microsoft already has paid a historic fine and shipped a new version of Windows without media player, another requirement of the antitrust ruling. "We've provided unprecedented access to Microsoft technology to promote interoperability with other industry players," Smith said. Smith said Microsoft revised technical documents just last week in response to new feedback, but every time it makes a change it finds the commission "moves the goal post and demands another change." Smith also charged that the commission's latest demand for internal workings of Windows to be documented and licensed is outside of the scope of the ruling and could open the door to producing clones of parts of its operating system. Shares of Microsoft recently fell 21 cents, or 0.8%, to $26.52. Get Jim Cramer's picks for 2006.