EU, M$ Work on Antitrust Compromise

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The European Union and Microsoft Corp. entered another big week in their long-standing antitrust case, with EU regulators insisting the software giant must make more concessions to comply with a landmark ruling by Wednesday or face huge fines.

Over the weekend, both sides continued to work on a compromise that has increasingly centered on pricing and royalties Microsoft can charge to open up its Windows source code to competitors so they can better dovetail their products to Microsoft's platform.

"We continue to work hard with the EU Commission toward an agreement on compliance," Microsoft spokesman Tom Brookes said late Sunday.

EU antitrust chief Neelie Kroes said last week she wants to take stock of the situation by Wednesday and could move to impose sanctions on noncompliance soon afterward if she is not satisfied with the concessions. The EU has within its rights the possibility to fine Microsoft up to 5 percent of its daily global sales for each day that a decision is not applied to its satisfaction.

EU antitrust regulators fined Microsoft a record $624 million when they ruled in March last year that the company abusively wielded its Windows software domination to lock competitors out of the market.

The orders of the European Commission require Microsoft to share under certain conditions its Windows server code with rivals to make the industry more competitive in the European marketplace.

Last month, the EU's regulators were still not convinced that the Windows version the company was forced to produce without Media Player was technically up to standard.

A Microsoft source said pricing disagreements on what it could charge for opening up its system were among the most pressing issues now.

"Pricing is certainly a question on the interoperability side - on the protocol side. What royalties can be specifically charged on the protocols" to improve interoperability, the source said.

Microsoft said in the past it would give competitors a price break on reviewing source code and more time to decide whether they want to license it.

Even if the June 1 deadline was missed, it could take more days or even a few weeks for the EU to actually impose sanctions, an EU official, who asked not be identified, said.

The last high-level contacts were last month, when Kroes held talks with Microsoft CEO Steve Ballmer. The two met at Ballmer's request to seek a breakthrough in the five-year standoff.

Associated Press