The EU fined Microsoft 2 80.5 million euros (£194 million) yesterday for failing to obey its 2004 antitrust order to share programme code with rivals.
New fines of 3 million euros (£2 million) a day will come into effect from the end of the month if the company still has not complied..
The new fines would take effect unless the company supplies "complete and accurate" technical information to developers to help them make software that works smoothly with its ubiquitous Windows operating system.
"I regret that, more than two years after the decision ... Microsoft has still not put an end to its illegal conduct," said EU Compet ition Commissioner Neelie Kroes in Brussels. "I have no alternative but to levy penalty payments for this continued noncompliance. No company is above the law."
The EU imposed daily fines of 1.5 million euros (£1 million) from December 15 to June 20 when it decided that Microsoft was still violating EU law - below a maximum of 2 million euros (£1.4 million) a day. In comparison, Microsoft earned 2.98 billion dollars (£1.6 billion) in the quarter ended March 31 on revenues of 10.9 billion dollars (£5.9 billion).
The EU had already levied a record 497 million euros (£344 million) fine on Microsoft in 2004 and ordered it to hand over communications code to rivals, saying it had deliberately tried to cripple them as it won control of the market.
Kroes also said she had warned Microsoft that it had to take care to avoid antitrust problems with its new operating system Vista, which will include an Internet search and a PDF-type document reader that could pose problems for current rivals.
"Microsoft is aware of it," she said. "Hopefully it will
be in a shape... that all those items are taken into account."
K roes said she had showed restraint on the new fines as the EU can fine a company up to 5 per cent of its annual global turnover.
Rejecting Microsoft's claims that the EU's demands were vague and shifting, the EU said the obligations were specific
and have not changed: "I don't buy that line," Kroes said, describing the EU's demands of March 2004 as "crystal clear".
Microsoft said it only fully understood what it needed to do after talks with the monitor this spring. The company said it has a team of 300 people working full-time on a framework to supply the information.