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This is a very interesting read from the Washington Post... yes i know its a little long....

Time appears to be running out for Microsoft Corp. to convince European antitrust regulators that a light touch is the best touch.

European Union antitrust leaders gathered in Brussels today and decided to unanimously support the European Commission's draft ruling to penalize Microsoft for alleged illegal monopolistic practices in Europe, The Associated Press reported. "The draft orders deep changes in the way the company operates. European Commission spokeswoman Amelia Torres said the closed-door session with representatives of the 15 EU governments ended around midday. 'The member states have unanimously backed the Commission's draft decision,' she said, without elaborating."

The New York Times reported that "the clock on the five-year-old antitrust case against Microsoft begins to run down. In less than two weeks, barring a last-minute settlement, the European Commission is expected to declare Microsoft an abusive monopolist, impose a fine of $100 million to $1 billion and order the company to make fundamental changes to the way it sells software in Europe. ... Such a ruling would be a significant setback for Microsoft after it overcame its most serious legal challenge by settling a sweeping antitrust case in the United States in 2001. And it would be the defining moment in the five-year tenure of Mario Monti, Europe's top antitrust regulator, whose term ends in the fall."
• The Associated Press via washingtonpost.com: EU Moves Forward With Tough Microsoft Antitrust Ruling (Registration required)
• The New York Times: Regulators Meet on Proposal To Brand Microsoft a Monopolist (Registration required)

Microsoft has been public in its desire to reach a settlement with European regulators. Despite the setback of Monday's meeting, don't expect Microsoft to stop its intense lobbying across the pond. "A settlement is possible any time before the commission issues its final ruling, which could come as soon as March 24," The Times said.

Indeed, Reuters reported that Microsoft is still working behind the scenes to make a deal with the commission. Dow Jones Newswires noted that "Monday's meeting solely concerned the draft decision -- and not a settlement -- the regulator said. The Commission could still reach a settlement with Microsoft on the case, the regulator added. In this scenario, the Commission would not need to consult national regulators over a settlement with the software giant ....A Microsoft spokesman in Brussels said the company's legal team remained in daily contact with the Commission, trying to resolve the long-running case amicably." The same article, however, said that time is running out, though Microsoft would prefer a settlement to a formal decision so it can avoid admitting wrongdoing.
• Reuters: EU Panel Seen Backing Microsoft Sanctions
• Dow Jones Newswires: EU Regulators Back Microsoft Draft Decision (Registration required)

The Associated Press explained more about Microsoft's lobbying hopes. "Microsoft is seeking to avert a far-reaching order that would not only result in a fine of up to $3 billion (2.45 billion euros), but also force the company to change the way it sells its flagship Windows to computer-makers in Europe. A negative decision would be the biggest setback for Microsoft since a U.S. judge found it guilty of antitrust violations involving Internet browsers in 2000. ... Sources familiar with the EU case say the draft ruling similarly finds Microsoft abused its monopoly in computer operating software to gain share in markets for digital media players and low-end servers."

The Financial Times, however, said the "European Commission has scaled down its demands for Microsoft to change its business practices in a move that some of the software company's opponents fear does not go far enough against Microsoft's alleged abuse of its Windows monopoly. But Microsoft too is unhappy with Brussels' proposed solution to the long-running antitrust case, which involves giving a central role to computer manufacturers." Another Financial Times article said that Monti's draft ruling "would involve forcing Microsoft to share more technical information and provide computer manufacturers with a version of Windows that did not include its Media Player."

Agence France Presse said that though regulators "could recommend fines totalling hundreds of millions of euros, Monti has said he is mostly interested in market remedies to redress the distorting effects of monopoly behavior. In Microsoft's case, sources said, this could take the form of a requirement that it detach the Windows Media Player from the Windows operating system used on 90 percent of personal computers. The media player handles sound and visual data, such as radio and TV streams and MP3 files."
• The Financial Times: Brussels Nears Microsoft Antitrust Ruling
• The Financial Times: Brussels Agenda: Microsoft Case Nears End
• Agence France Press via Yahoo! News: EU States Back Sanctions Against Microsoft

The New York Times explained more about the net impact of the EU decision on Microsoft: "The greatest effect of a ruling against Microsoft would be evident in the way the company sells its music and video-playing software program Media Player. Instead of bundling the program into its Windows operating system as Microsoft does now, the European Commission is expected to demand that Microsoft sell two versions of Windows to manufacturers of personal computers - one of them with Media Player stripped out."

More on the European regulators' sanction plans, from BBC News Online: "The panel is also expected to endorse a fine of hundreds of millions of euros, but not until a second and final meeting on 22 March. Brussels reportedly intends to give Microsoft a deadline to get its house in order or face additional action. Commission officials have worked and re-worked their draft to stand up to court scrutiny, since Microsoft is almost certain to appeal against any adverse decision."

A Long Way For Longhorn

Meanwhile, back at the bat cave... Microsoft's next version of its flagship operating system remains an embryo under the microscope. Inquiring minds still want to know when the operating system, dubbed Longhorn, will be ready. Don't hold your breath. "Sometime in the future," said Windows Group Vice President Jim Allchin, according to The Seattle Post-Intelligencer. (Microsoft certainly isn't this vague with European regulators about its settlement desires.) "Allchin's response, more than showing his sense of humor, underscored the uncertainty surrounding the timing of the next Windows release, code-named Longhorn. It's an issue with deep implications for Microsoft's business and for corporate users of the operating system. Microsoft has been vague on the subject. Another top Windows executive, Will Poole, said at a conference last year that Longhorn would ship sometime in 2005. But more recently, company executives have declined to be so specific. That has led many analysts to assume that Longhorn is more likely to come in 2006 or even 2007 -- five or more years after the 2001 debut of the current version, Windows XP."

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