EU Weighs Microsoft's Last-Minute Proposals

BRUSSELS -- Antitrust authorities are sifting through Microsoft's final proposal to comply with a European Commission decision, which the software giant submitted near a midnight deadline, a commission spokesman said Wednesday.

If the proposals fall short, Microsoft will face a fine of up to $5 million daily, which could be imposed before August.

"Contacts continued between the European Commission and Microsoft until late last night, and the commission will now carefully analyze what's on the table," Commission spokesman Jonathan Todd said.

He said the European Commission would assess "whether or not we consider that Microsoft has complied with the March 2004 decision."

"We can confirm that the proposals did go into the commission last night prior to the deadline and we await the commission's response," Todd said.

The European Commission, which polices competition in the 25-nation European Union, fined the U.S. software giant a record 497 million euros ($654.9 million) on March 24, 2004, which it has paid.

But it had dragged its feet on other penalties, which were supposed to take effect in the spring and summer of 2004.

First, Microsoft took the European Commission to court in an attempt to delay these penalties -- known as remedies -- until a broader challenge to the decision was settled in 2006 or later.

When a judge turned that down in December, Microsoft was not ready to submit versions of the remedy acceptable to the commission, which is the judge of their adequacy.

It kept talking, until Competition Commissioner Neelie Kroes finally drew the line.

Under the imposed remedies, Microsoft must make its ubiquitous Windows operating system available without Windows Media Player, so that computer makers can buy alternative software to play films and music from RealNetworks and Apple.

And the company must share information with rival makers of servers used to run printers and retrieve files, an issue known as interoperability. The company must also propose an acceptable trustee to monitor compliance.

The European Commission has said that it will take weeks to analyze Microsoft's latest attempt.

If Microsoft fails to comply, the Commission will bring a new formal action for its failure and issue a formal statement of objections. Microsoft would have two weeks to reply and then the commission would impose a fine.

That fine could be up to 5 percent of its daily turnover worldwide, which is about $5 million, and would begin once the commission acts.

It is unlikely the fine would be suspended should Microsoft decide to appeal, a spokesman for the European Commission has said.