EU, Microsoft wrangle as deadline nears

David Lawsky

BRUSSELS: Microsoft neared the end of intensive talks to try to settle a landmark EU antitrust suit that hinges on whether it is willing to make binding, broad commitments to change the way it does business in Europe, a source close to the talks said.

A European Commission spokeswoman said the EU executive was determined to make a decision at a meeting on March 24, ruling out any extension for further negotiations in the five-year probe.

"What I believe is that we are on track ... for an announcement next week, which was always the plan," Commission spokeswoman Amelia Torres told a news conference.

European Competition Commissioner, Mario Monti has backing from EU governments for a draft ruling finding Microsoft broke antitrust law and requiring the software giant to change the way it sells audiovisual software. The EU also plans to impose a fine of hundreds of millions of euros.

But Microsoft is negotiating to try to avoid a precedent-setting ruling branding it an abusive monopolist.

Microsoft's share price was down four cents at $25.14 in afternoon U.S. trading.

Chief Executive Steve Ballmer and general counsel Brad Smith met Monti for several hours on Tuesday in the competition directorate's green steel-and-glass building.

Contacts between the two sides continued on Wednesday, with neither party disclosing anything of substance. After a long day of virtual silence, EU spokeswoman Torres told Reuters at 9 p.m. (2000 GMT): "There'll be nothing more tonight."

She declined to say if talks would continue on Thursday.

FAR BROADER

Microsoft reached settlements with the Commission in 1994 and 1997. It has headed off other Commission investigations by agreeing to change its behavior towards particular companies.

But any settlement this time would have to be far broader to avoid a repetition of similar cases by changing the way Microsoft does business in Europe, the source said.

If there were a provisional settlement, that too would go to the full 20 member Commission next Wednesday. Interested third parties would then have approximately a month to comment.

Experts say that given likely bureaucratic delays, any final compromise would not be officially completed until after May 1, when a new law takes effect permitting a so-called settlement decision.

That statute would make any settlement binding on Microsoft, permitting the Commission to reopen proceedings against the company rapidly if Brussels believed it had broken the deal.

(Additional reporting by Paul Taylor in Brussels)

© Reuters