Microsoft fined €280m by EU regulators

Microsoft was fined €280.5m (£195m) yesterday and threatened with higher daily penalties of €3m as the legal battle between the world's largest software maker and European regulators reached a new pitch.

The punishment, for failing to comply with an order to make technical information available to rivals, is the second massive fine levied against the US corporation. In March 2004, it was ordered to pay a record €497m.

Microsoft promised to appeal against the decision, increasing the extensive litigation already under way between the two parties.

For her part, the European competition commissioner, Neelie Kroes, threatened to raise the potential daily fines against Microsoft to €3m if it continues to defy rulings designed to prevent the company from locking rivals out of the market.

She said: "No company is above the law. It is to give a clear signal to Microsoft that they have to deliver, they have to stop their abuse."

Yesterday's fine was for failure to make available information required by rival companies to ensure their products are compatible with Windows, the software that runs on 95 per cent of the world's PCs.

The order was equivalent to €1.5m per day for the period in question, less than the €2m threatened by the commission in December. However, the regulator kept open the option of increasing this if it finds against Microsoft on a second issue which it has yet to assess, relating to the royalties charged by Microsoft.

Brad Smith, Microsoft's general counsel, said the company would contest in court whether the commission made its demands clear enough. Microsoft says its competitors are using similar information in the US without complaining about its quality.

Ms Kroes rejected the argument that the demands were unclear, though she said there had been recent progress from Microsoft in the supply of documents.