The Commission has repeatedly claimed that Microsoft is
violating its 2004 antitrust order and as recently as March accused
it of breaking its conditions. One structural remedy is the
enforced breaking up of a dominant company.
Neelie Kroes told the American Bar Association last week that
Microsoft has refused to comply with the Commission's orders and
that in cases where companies ignore orders, an escalation of
punishments is necessary.
"We need to consider under which circumstances structural
remedies would be more appropriate or even necessary to remedy
certain competition problems," she said, when asked about what the
Commission had learned about remedies in the Microsoft case.
"There could be a situation in which a dominant company has
repeatedly abused its dominant position, or where it has
consistently failed to comply with a behavioural remedy despite
repeated enforcement action," said Kroes. "From this it could be
reasonable to draw the conclusion that behavioural remedies are
ineffective and that a structural remedy is warranted.
Kroes, a transcript of whose remarks was provided by her office,
said that Microsoft fitted the description of a company which had
not complied with Commission orders. "This is a highly exceptional
circumstance – in 50 years of EU antitrust policy, we have never
before encountered a company that has refused to comply with a
Commission Decision," she said.
Microsoft this week handed in documents defending the licence
fees it is charging competitors with whom it is sharing some of its
technology under order from the European Commission. The Commission
said in March that the high price at which Microsoft shared the
code broke the terms of a 2004 order.
In 2004 Microsoft was found guilty by the Commission of behaving
anti-competitively and was ordered to share elements of its source
code. The Commission had ruled that the company was using its
dominance in the desktop computer market to achieve unfair
advantage in the workgroup server market.
Microsoft interpreted the order to share source code as
permitting it to charge for the sharing. It charges companies
according to the revenue from any software built using its
technology and is charging fees of between $5.60 and $666.75 per
server for its technology.
In March the Commission said that it believed that the high
charges represented a violation of its order that code be shared on
"reasonable terms". Microsoft submitted documents to the Commission
this week which it said answered that charge.
Microsoft said that it had not requested an oral hearing on the
matter, in an effort to end the dispute more quickly.
The break up of Microsoft was discussed once before, in the
course of a US antitrust taken against the company. A federal court
ordered that the company be broken up in order to curb its
dominance of the PC operating system market, but that order was
overturned on appeal.
