EU to make Microsoft fines decision by end of July

The European Union said today it expects to make a decision on whether to impose new fines on Microsoft Corporation by the end of July.

EU spokesman Jonathan Todd said EU anti-trust regulators hoped to have a decision “before summer holidays … before the end of July.”

EU officials said yesterday regulators might need several weeks to decide whether to slap Microsoft with huge fines once a June 1 deadline for the software maker to comply with a landmark ruling expires.

“We’re in regular contact with Microsoft and we have no reason to believe they will not make their final offer before midnight tonight,” Todd said. “It will take time to analyse this proposal. I can’t say whether they’re going to fall into line or not.”

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.

In March 2004, EU anti-trust regulators fined Microsoft a record €505m when they ruled the company abusively wielded its Windows software domination to lock competitors out of the market.

The June 1 deadline is for Microsoft to submit a final plan for how it will comply with the EU’s anti-trust ruling.

If dissatisfied with the response, the EU would then have to send a formal notification to Microsoft and give the company about 10 working days to respond. If still dissatisfied, EU governments and the full 25-member Commission then would have to agree on imposing the fine.

Todd said Microsoft could appeal to the EU Court of Justice, Europe’s highest court. “It wouldn’t be a suspensive appeal. They can ask for interim measures to be taken.”

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

The EU requires 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.

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.

When imposing the June 1 deadline last week, Kroes said it was “the end of the game”.