EU and Microsoft enter another big week

The European Union said its anti-trust regulators might need several weeks to decide whether to slap Microsoft Corp. with huge fines once a midnight deadline on Tuesday for the software maker to comply with a landmark ruling expires.

“This is highly complicated stuff and therefore we will see what they come up with and analyse it carefully,” said EU Commission spokesman Jonathan Todd. “Once the deadline has expired, it will take several weeks to analyse what’s on the table.”

Both sides worked over the weekend to reach a compromise, talks for which increasingly have centred on pricing and royalties that can be charged to allow software competitors to better dovetail their products with Microsoft’s Windows platform.

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

The EU can fine Microsoft up to 5% of its daily global sales for each day that a decision is not applied to the EU’s satisfaction.

After the analysis, the Commission “will either conclude that it is sufficient or not, in which case we will set in motion the procedure for fining them,” Todd said.

In March 2004, EU antitrust regulators fined Microsoft a record €499m when they ruled 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 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 the software giant could charge for opening 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 person said.

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

During the last high-level contacts last month, EU anti-trust chief Neelie Kroes held talks with Microsoft CEO Steve Ballmer at Ballmer’s request to seek a breakthrough in the five-year stand-off.