Microsoft faces EU fines

The Commission, the European Union's executive body, said yesterday that it felt it had a strong case in its four-year antitrust probe against Microsoft and the amount of the fine would be linked to the severity and duration of the company's perceived offence.

"At this stage, we have so much evidence and we are in possession of such substantive a file that we believe any decision we take will withstand scrutiny of the European court," Commission spokesman Tilman Lueder told a briefing.

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Whatever the size of the fine imposed by the Commission, Microsoft can dip into its cash holding of $49 billion.

In New York, Microsoft shares were marginally weaker in morning trade, down 0.6 percent at $25.51, outperforming the Nasdaq Composite index, which was down 1.3 percent.

A spokeswoman for Microsoft said the company was examining the Commission's preliminary finding, which she described as unfortunate because it would lengthen the duration of the case, which began in 1999.

"We take this investigation very seriously and will work hard to focus our efforts, responding to concerns and bringing this to a positive conclusion," said Tiffany Steckler in Paris.

She said Microsoft had dealt with some of concerns raised by the Commission through remedies it agreed to in its US case.

But the Commission said: "The Commission's preliminary conclusion is that Microsoft's abuses are still ongoing."

It accused Microsoft of leveraging its dominant position in media players, software that plays movies and video on computers, and low-end servers which manage everything from Web sites to email systems.

The EU executive said it was giving Microsoft a final chance to comment before it orders the firm to share crucial server interface protocols with competitors such as Sun Microsystems Inc. and Oracle Corp. and forces changes to the way it offers its media player, to the possible benefit of Real Networks and Apple.

Currently, the Windows Media Player is bundled with the ubiquitous Windows operating systems, which critics say puts competing software programs at a disadvantage.

The Commission said Microsoft would have two alternatives to facilitate fairer competition in media players.

It may untie Windows Media Player from Windows by offering the operating system software without Media Player, or it may include competing media players with Windows.

"Both solutions seek to ensure that consumers have a fair choice as regards media players," the Commission said.

But Thomas Vinje, a lawyer for Microsoft opponent Computer and Communications Industry Association, said: "The only remedy which is likely to be effective against tying is untying."