Microsoft nears deal with EU watchdog

Microsoft nears deal with EU watchdog

BRUSSELS (Reuters)-Microsoft (Nasdaq:MSFT – news) moved a step closer to ending a long battle with the European Union”s antitrust watchdog on Monday, winning praise for proposals to comply with demands for server interoperability.

The U.S. software giant could be hit with a fine of up to $5 million a day if the European Commission concludes that its proposals would not allow non-Microsoft work group servers to achieve full interoperability with Windows PC and servers.

But the EU executive voiced satisfaction with Microsoft”s proposed solution — even though the sticky question of &#34open source&#34 licenses was not fully resolved — and said the plan would now be put to industry peers for their opinion.

&#34I am happy that Microsoft has recognized certain principles which must underlie its implementation of the Commission”s decision,&#34 European Competition Commissioner Neelie Kroes said in a statement.

A Commission spokesman said there were &#34no outstanding issues&#34 on Windows Media Player, the second of two antitrust violations for which Microsoft could face fines, because proposals for compliance had already been tested in the market.

The Commission, which polices competition in the 25-nation bloc, fined Microsoft a record 497 million euros ($609.8 million) more than a year ago and demanded changes to its business practice, which it found were an abuse of a quasi-monopoly on computer software.

Microsoft was required to make its ubiquitous Windows operating system available without Windows Media Player, so that computer makers can buy alternative software, to play films and music, from RealNetworks (Nasdaq:RNWK – news) and Apple (Nasdaq:AAPL – news).

&#34As regards media player we market tested that earlier this year and, under the caveat that nothing is agreed until everything is agreed, we do not feel at the moment we have any outstanding issues that require market testing as regards the version of Windows without media player,&#34 spokesman Jonathan Todd told a news briefing.

Under the interoperability demands, Microsoft must share information with rival makers of servers used to run printers and retrieve files.

Microsoft”s proposals for compliance will now be &#34market tested&#34 with other industry players over a two-week period to enable the Commission to make a final assessment.

&#34Subject to the results of this market test, work group server developers interested in receiving interoperability information from Microsoft will be able to develop and sell their products on a global basis,&#34 the Commission said.

&#34Microsoft has also recognized the need to enhance the options available to recipients by creating a range of packages of information from which they can choose according to their needs,&#34 it said in a statement.

In addition to agreeing to allow the development and sale of interoperable products on a worldwide basis, Microsoft has also recognized that &#34a category of the information which it is obliged to disclose&#34 will be royalty-free.

However, the Commission said Microsoft considers that the software source code developed by recipients of interoperability information that implements the company”s protocols should not be published under a so-called open source license.

It said that if Microsoft loses its European court case on this issue, the Commission would ensure that it would become possible to use some interoperability information from Microsoft in software products distributed under an open source license.

Open source licensing was one of the problematic areas in negotiations between the Commission and Microsoft.