Microsoft and EU fail to reach antitrust settlement

18 Mar 2004

A last ditch attempt by Microsoft to dissuade the European Commission from ruling that the software giant has broken EU law has failed. Europe’s competition commissioner Mario Monti said this afternoon that a draft decision to punish Microsoft has already reached unanimous backing from 15 member states.

A draft decision revealed on Monday requires Microsoft to share proprietary information with rival server makers and to provide computer manufacturers with a second version of Windows stripped of built-in audiovisual software. Microsoft also faces the prospect of a fine expected to run into hundreds of millions of euros as part of the EU’s sanctions against the company.

Microsoft chief executive Steve Ballmer flew into Brussels for a meeting yesterday with Monti to dissuade Brussels from ruling that Microsoft had broken EU law. However, Ballmer’s attempt failed and it looks like the draft decision may become a reality next week.

In a statement this afternoon Commissioner Monti said: “A settlement on the Microsoft case has not been possible. I therefore intend to propose to my colleagues in the Commission next Wednesday to adopt a decision, which has already received the unanimous backing of member states.

“I would like to stress the constructive and co-operative spirit displayed by Microsoft in the last few weeks. I also want to acknowledge the high degree of professionalism of the members of the Microsoft team at all levels.

“We made substantial progress towards resolving the problems which have arisen in the past but we were unable to agree on commitments for future conduct. In the end, I had do decide what was best for competition and consumers in Europe. I believe they will be better served with a decision that creates a strong precedent.

“It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position in the market,” Monti said.

The EU advisory committee is due to meet again on 22 March to decide whether to endorse the proposed fine, with the Commission’s final ruling coming two days later on 24 March. It is understood that the draft decision gives Microsoft a specific deadline to get its house in order or face additional actions.

By John Kennedy