Microsoft faces daily fines in EU antitrust case
Brussels: The European Commission has threatened Microsoft with daily fines for failing to comply with antitrust sanctions, saying that the fines may go up to US$2.4mn a day, unless the software giant complies with an EU court order to provide key information that will allow rivals' group servers to work with its ubiquitous Windows operating system.

The EU competition commissioner, Neelie Kroes said in a statement that Microsoft had five weeks, until January 25, to reply and show it was in compliance with the EU demands. The statement also said that any fines would be retroactive to December 15.

Microsoft called the move unjustified and said it was doing its best to obey the European antitrust watchdog's landmark March '04 ruling, but that Brussels kept "moving the goalpost". The company stated its intention to contest the latest decision to the full extent allowed by EU law including by demanding an oral hearing, which can take months to organise, thereby extending the procedure to its limit.

The Commission ruled in '04 that Microsoft had abused its global dominance by leveraging its near monopoly in the market for PC operating systems and for media players to squelch rivals. It imposed a record Eu497mn fine and forced Microsoft to sell a version of Windows without the Windows Media Player software used to watch films and listen to music, giving rivals a fairer chance to compete.
Back to News Review index page  

IMF approves US$685mn loan for Iraq
Washington, USA: The International Monetary Fund on Friday approved a US$685mn loan package for Iraq, which is intended to help the war-torn country's economy tide over the next 15 months.

Last year, Iraq received an initial loan from the IMF that was designed to smooth the country's talks with its international creditors. Iraq completed a debt exchange deal with its creditors that U.S. treasury secretary John Snow said would reduce Iraq's Saddam Hussein-era debt by more than US$11bon.

The fresh deal enables Iraq to exchange about $14 billion in commercial claims for new debt, said Ernst & Young, which manages Iraq's debt reconciliation program. Snow said the conclusion of a stand-by agreement with the IMF "will underpin economic stability and help lay the foundation for an open and prosperous economy in Iraq."

Iraqi authorities plan to expand the country's oil sector, improve public services and reduce general subsidies and strengthen administrative capacity. The program supported by the IMF sees an acceleration of economic growth to 10% in 2006 and a reduction in the rate of inflation to about 15%.
Back to News Review index page  

Tommy Hilfiger sells out for US$1.6bn
New York: Clothing designer Tommy Hilfiger Corp. has agreed to a US$1.6bn buyout by Apax Partners & Co. after experiencing falling sales, and losing prime customers such as department stores in the US. Apax, is part owner of the Calvin Klein brand and manager of a US$5.1bn buyout fund.

Company founder Tommy Hilfiger will stay on as principal designer.

Tommy Hilfiger put itself up for auction after losing orders from U.S. department stores, even as its designs fell out of favor with teens who defected to brands such as Sean John.

To make up for declining sales to department stores, Tommy Hilfiger is now concentrating on opening more of its own stores and expanding base in Europe and Asia. Earlier this year, the company bought German designer Karl Lagerfeld's label to expand into luxury apparel. Analysts however said that the Lagerfeld initiative may well be too small to benefit the company materially in the near term.

Tommy Hilfiger in 2001 bought its European licensee and has since been expanding in the region. Earlier this year, it acquired from a former distributor the rights to distribute and manage the Tommy brand in Italy and opened its first retail store in Milan.

Apax has been investing in retail companies, buying the Calvin Klein brand with Phillips Van Heusen in 2002. It also owns Tommy Bahama, a designer of upscale casual clothing, according to the Apax Web site. Its investments include the Waterstone's chain of bookstores and Dollar Tree Stores Inc., an operator of discount stores that sell items for about US$1 or less.
Back to News Review index page  

Arcelor tops ThyssenKrupp's offer for Dofasco
London: Arcelor, the world's No.2 steel maker after Mittal Steel, on Friday increased a hostile bid for Canada's Dofasco to C$4.9bn, which tops a offer made last month by rival, ThyssenKrupp of C$4.8bn.

Arcelor, based in Luxembourg, would have to pay ThyssenKrupp C$100mn as a breakup fee. Arcelor said its offer will be valid for 35 days.

ThyssenKrupp and Arcelor are seeking to increase market share, and their bargaining power with suppliers of raw materials, which have gained in price this year. Dofasco, based in Hamilton, Ontario, produces iron ore in excess of its steel-making needs and has 10 per cent of the North American auto steel market.

Prices of iron ore, a key ingredient in steel, have soared 71.5 percent this year to an all-time high on surging Chinese demand, cutting into profit at Arcelor and other steel makers.

Buying Dofasco, which supplies Ford with steel for vehicles, would increase Arcelor's slice of North America's automotive steel market to 12 percent from about 1 percent now. In Europe, Arcelor supplies steel to one of every two cars.
Back to News Review index page