EC gives Microsoft a May deadline to agree on sanctions

Microsoft has until the end of the month to reach an agreement with the European Commission on how it will meet antitrust sanctions imposed against it, or face a NZ$7 million a day fine.

European Competition Commissioner Neelie Kroes gave the May deadline Monday, following reports that Brussels was growing impatient over the software maker's pace.

If Microsoft does not reach an agreement with the regulator by the first of June, the Commission will decide whether it wants to initiate proceedings to impose a daily fine for noncompliance, according to spokesman Jonathan Todd. The Commission could fine Microsoft up to 5% of its daily sales, equal to $7 million.

"Of course, the best outcome is if they satisfy the Commission. We are in regular contact," Todd says.

Microsoft is working hard to reach an agreement with the Commission and is aware of the timeline, a spokesman for the company says.

The Commission ruled last March that Microsoft abused its dominance in the PC operating systems market to gain an edge in related markets. It fined the software maker €497 million (NZ$880 million) and ordered it to sell a version of its Windows operating system in Europe without Windows Media Player (WMP). It also ruled that the company had to give competitors access to information that would allow them to make their workgroup server products run smoothly with Windows-based PCs.

Microsoft has paid the fine, but details of the other two remedies have been under negotiations. The Commission has already fallen out with the software maker over its proposed name for the WMP-free version of Windows, which it wanted to call "Windows XP Reduced Media Edition". The regulator said the name was unattractive to consumers and Microsoft eventually agreed to call player-free versions of its operating system by the Commission's suggested names of "Windows XP Home Edition N" and "Windows XP Professional Edition N".

Licensing terms for the workgroup server protocols have also been a sticking point and need to be resolved before the two sides can move forward.

If the Commission decides it wants to impose a fine for noncompliance, the process could take weeks to implement, Todd says.

Asked if Microsoft is prepared to pay the fine, the spokesman says it is too early to speculate.