Microsoft Still Hopes To Settle With EU

It's talking to the European Union to avoid extensive changes to its business practices as antitrust regulators prepare to wrap up their case against the company.
BRUSSELS, Belgium (AP) -- Microsoft Corp. said Tuesday it was still talking to the European Union to avoid extensive changes to its business practices as antitrust regulators wrap up their long-running case against the U.S. software giant.

The European Commission, which is aiming to decide the case this spring, confirmed late Monday that a draft ruling is undergoing internal review but said it has yet to settle on fines.

"At this point, the European Commission is on the verge of wrapping up its Microsoft investigation," said spokeswoman Amelia Torres. "There's a draft decision, but the decision itself has not been made, and certainly we cannot speak of fines yet."

Draft decisions are almost by definition negative and often are used to increase pressure on the company involved to make more concessions.

Microsoft said Tuesday it was still "actively engaged" with the Commission in seeking a "positive resolution."

"We're doing what we can to come to some amicable settlement," Microsoft founder Bill Gates said last weekend in Davos, Switzerland.

Regulators charged last August that Microsoft's decision to tie its Media Player into Windows, which runs about 90 percent of desktop computers, "weakens competition on the merits, stifles product innovation and ultimately reduces consumer choice."

They have threatened a far-reaching order for Microsoft to strip the multimedia application from Windows to give rivals such as RealNetworks' RealPlayer or Apple's QuickTime more of a chance.

The EU also wants Microsoft to disclose more software code to competitors in the market for low-end servers so they can make products that work as well with Windows as Microsoft's own.

That part of the EU's case may have been bolstered by last week's admission by the trial judge in the U.S. antitrust case that one important provision in the settlement she approved in 2002 isn't working as well as expected.

The landmark U.S. settlement compels Microsoft to offer its technology to rivals to build products that seamlessly communicate with computers running Windows software. But lawyers disclosed that only 11 competitors have paid Microsoft for licenses so far, fewer than had been expected.

After November's hearings--the last stage in the 5-year-old case--the Commission said it expected to have a decision by this spring unless it reaches a settlement with the U.S. software giant before then.

To avoid new delay, EU officials said competition commissioner Mario Monti would probably seek adoption of decision by the full Commission before 10 new appointees from the 10 new EU member countries join May 1.

Antitrust decisions are circulated internally before adoption for comment, a process that could take 10 days or more. It then goes to an advisory committee of national competition authorities. Fines are usually set later, a couple days before the decision is adopted.

Although EU regulators announced in August they intend to fine Microsoft for past antitrust abuses, they could still change their mind, officials said.

The EU can fine violators up to 10 percent of their worldwide sales--which would be more than $3 billion in Microsoft's case. In practice, fines have never exceeded 1 percent.

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