Neelie Kroes

"Microsoft was the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," said European Competition Commissioner Neelie Kroes earlier today.

She added: "I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance with the Commission's March 2004 decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft's future conduct."

Kroes made the comments after announcing that the Commission had decided to fine the US software company €899 million. The penalty comes on top of the original €497 million that Microsoft was ordered to hand over in 2004 after officials found that it had abused its dominant position by refusing to provide interoperability information to competitors and a €280.5 million non-compliance penalty levied in 2006.

The Commission's March 2004 decision, which was upheld by the Court of First Instance last year, required Microsoft to disclose interoperability information to developers on reasonable terms.

Initially, Microsoft had demanded a royalty rate of 3.87% of a licensee's product revenues for a patent licence and 2.98% for a licence giving access to the secret interoperability information. It reduced these rates for sales within the European Economic Area to 0.7% and 0.5% respectively in May last year, two months after the Commission sent the company a statement of objections outlining its concerns about what it called Microsoft's "unreasonable pricing".

But the Commission says that it took until October 2007 - when Microsoft agreed to fall into line with the antirust ruling - for the company to provide a licence giving access to the interoperability information for a flat fee of €10,000 and an optional worldwide patent licence for a reduced royalty of 0.4 % of licensees' product revenues.

The Commission fined Microsoft €280.5 million in July 2006 for failing to comply with its 2004 decision. Today's penalty is designed to punish the company for the period of non-compliance from June 2006 to October 2007.

Last week senior Microsoft officials attempted to head off criticism of the company's practices on interoperability by promising to make four key changes to the way it does business. They pledged to ensure open connections for high volume products, promote data portability for high volume products, enhance Microsoft's support for industry standards, and foster a more open engagement with the software industry in general, as well as the open source software community in particular.

But the European Commission expressed scepticism about whether the company would change its practices.

In a statement issued on the same day as Microsoft made its commitment, it said: "This announcement does not relate to the question of whether or not Microsoft has been complying with EU antitrust rules in this area in the past. The Commission would welcome any move toward genuine interoperability. Nonetheless, the Commission notes that today's announcement follows at least four similar statements by Microsoft in the past on the importance of interoperability."