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Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, June 2, 2005

Microsoft meets EU deadline

Microsoft Corp. met its midnight deadline to submit a compromise on its landmark antitrust case with the European Union, and EU regulators will likely assess the proposal for weeks before deciding whether to impose fines, officials said yesterday.

"We have submitted the proposals, and we are awaiting a response from the EU Commission," said Microsoft spokesman Tom Brookes. If the EU deems the proposals insufficient, it could slap heavy sanctions on the software titan.

"We will now analyze it very carefully and decide whether it is sufficient or not," EU antitrust spokesman Jonathan Todd said.

A person familiar with the situation said that Microsoft's last-minute submission contained a "few new proposals," but declined to describe their content. A spokesman at Microsoft's Redmond, Wash., headquarters wouldn't comment on the content of the proposals.

Microsoft has to answer complaints from the EU head office that it wasn't fully complying with last year's ruling against the company, which imposed a fine of €497 million ($612 million) and ruled that the company abusively wielded its Windows software domination to lock its competitors out of the market.

The EU has the power to slap fines as high as 5% of a company's daily global revenue if its antitrust decisions aren't respected. In its last fiscal year, which ended June 30, 2004, Microsoft had revenue of $36.8 billion.

Both sides had contacts almost up until midnight Tuesday, the EU-imposed deadline following weeks of negotiations.

"We received all sorts of documents," said Mr. Todd, refusing to discuss the content of the proposal.

Once the commission has come to a decision on the Microsoft proposal, it will inform the company, which will then have time to rebut. Then the EU member states will be consulted, and the full EU executive commission will decide on the case. The whole process will probably last until the end of July.

During the last days of talks, negotiations centered on pricing and royalties that can be charged to allow software competitors to better dovetail their products with Microsoft's Windows platform.

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