The European Commission, the European Union's executive authority, this week will announce antitrust sanctions against Microsoft, as well as confirm fines totaling up to $300 million.
BRUSSELS--The European Commission, the European Union's executive authority, this week will announce antitrust sanctions against Microsoft, as well as confirm fines totaling up to $300 million.
Microsoft was ordered to remove its music and movie-playing service from its Windows operating system after failing to ward off European regulators in last-minute antitrust talks last Thursday.
The E.C. is asking Microsoft to distribute two different-priced versions of Windows: one with the Window Media Player system and one without.
IMPASSE AFTER TALKS
The move comes after European Competition Commissioner Mario Monti and Microsoft CEO Steve Ballmer failed to bridge their differences following two days of talks in Brussels on how to format new versions of Windows.
"A settlement to the Microsoft case has not been possible," Monti said. "We made substantial progress towards resolving the problem that had arisen in the past, but we were unable to agree on commitments for future conduct."
The impasse marks the end of a five-year E.U. probe called by rivals RealNetworks and Apple, who had argued that Windows Media Player had an unfair advantage over other movie, music, radio and TV streaming software because Microsoft "bundled" it onto all sales of the regular Windows system. The EC had urged Microsoft to distribute a version of Windows without the media player at a discount.
'ABUSIVE' MARKET POSITION
Monti said it was necessary to set a legal precedent against a company that is abusing its dominant market position, as 92% of all computers use Windows.
"I had to take a decision on what was best for competition and for consumers in Europe," he said. "It is essential to have a clear principle for the future conduct of a company which has such a strong dominant position in the market."
E.U. government representatives will confirm the size of the fine against Microsoft on Monday.
The decision could pave the way for rivals to sue Microsoft for breaching E.U. antitrust law. One EU insider said it was possible for European affiliates of Sun Microsystems or RealNetworks, for example, to seek compensation for years of market abuse by Microsoft.
Meanwhile, Monti praised the "constructive and cooperative spirit" and "high degree of professionalism" of Ballmer and his colleagues in their talks.
MICROSOFT APPEAL SEEN
Microsoft spokesman Tom Brookes said the company would almost certainly appeal the decision in the E.U. courts. "We will await the formal decision, but we expect to appeal," he said.