New reports show Microsoft's compliance with a landmark antitrust ruling continues to be "entirely inadequate" and the company may soon face a fine up to €2 million daily, the European Commission said yesterday.

The Commission found two years ago that Microsoft used its dominant position in the Windows operating system to damage rival makers of server software used to run printers, password sign-ins and file access for small work groups.

"Microsoft is still not in compliance with its obligations under the March 2004 commission decision," the Commission said.

Microsoft has challenged the 2004 decision and a hearing on its underlying case is set before the Court of First Instance (CFI) in Luxembourg, starting on Monday, April 24.

Parties for all sides met CFI president Bo Vesterdorf and reporting judge John Cooke to decide the schedule, according to sources.

On Monday and Tuesday, issues surrounding Media Player audio-visual software will be discussed, while on Wednesday and Thursday questions on interoperability will be discussed. Friday will be for summing up and minor issues.

Microsoft was fined €497 million in 2004 and ordered to provide interconnections so competitors could get their server software to run as well as Microsoft's own with Windows desktop machines.

It was also ordered to offer a version of its Windows operating system without audio-visual software.

The commission opened proceedings to fine Microsoft in a Statement of Objections issued on December 21, 2005. It said the company failed to document the interoperability software properly and rivals could not use it.

Microsoft later provided additional information and offered to open some of its secret source code to licencees, but further reviews by the Commission's Monitoring Trustee and TAEUS, a consultancy from Colorado, said those gestures meant little.

"The (TAEUS) report describes various parts of the documentation as 'entirely inadequate', 'devoted to obsolete functionality' and 'self-contradictory'," the commission said in a statement.

"TAEUS concludes that Microsoft's documentation was written 'primarily to maximise volume [ page count] while minimising useful information'," the commission said.

Microsoft rejected the commission's findings. "That documentation, coupled with free technical support and source code access for licencees, meets and surpasses the requirements of the commission's 2004 decision," the company said. - (Reuters).