EU denies extension for Microsoft

Microsoft moved a step closer to being fined about €1 million a day after the European Commission refused to extend a Feb. 15 deadline for compliance with its anti-trust ruling.

Microsoft had asked for an extension until Feb. 28 to respond to the Commission’s charges that it failed to meet its demands for ensuring interoperability between Microsoft’s server software and competing products.

But the Commission official dealing with the case, known as the hearing officer, decided on Wednesday not to grant a further extension, a Commission spokesman said.

“She took the view that a time period of eight weeks should be sufficient for Microsoft to reply to a comparatively short statement of objections,” said Commission spokesman Jonathan Todd, referring to the document that sets out the Commission’s concerns over Microsoft’s compliance efforts.

The Commission also denied Microsoft’s request for access to correspondence between the Commission, its internal technical advisors and an independent trustee monitoring the company’s compliance efforts.

“The hearing officer maintained her position that the correspondence is internal and in principle irrelevant for the purposes of Microsoft’s rights of defense,” Todd said on Thursday.

Microsoft argues that by refusing to grant it access to the documents, the Commission is denying it the ability to mount an effective defense.

“Last week the Commission said it was premature for Microsoft to allege they are riding roughshod over our rights of defense,” said Horacio Gutierrez, Microsoft Europe’s associate general counsel. “Today we are less than a week away from the deadline for filing our response and have been denied access to the complete file, so I suppose it is now official and they are indeed riding roughshod over our defense rights,” he said.

Todd maintained that if the report of the monitoring trustee, which the Commission will use to justify fining the company for noncompliance, is factually wrong, Microsoft would be able to prove this without needing access to the internal correspondence.

The Commission’s complaint is that Microsoft has failed to comply with one part of its March 2004 anti-trust ruling, which ordered the Redmond, Wash., company to ensure interoperability between its workgroup server software and competing products.

It asked the company to provide adequate documentation on the server software’s communications protocols. The Commission says the company has failed to do this, and it seems unlikely to accept an offer by Microsoft to grant access to the source code for the communications protocols.

With six days to the deadline, it appears unlikely that Microsoft will perform a U-turn and meet the Commission’s demands, although it is expected to reply to them formally. The company will also request a hearing to present its arguments. The Commission would not start to impose the fines until after the hearing, which would likely start in a couple of weeks.

A decision to fine the company has to be approved by all of the European Union’s 25 commissioners. The fines would be back-dated to Dec. 15.

The Commission is expected to issue a second statement of objections in the near future, challenging the prices the company is charging for access to its communications protocols.