The Marketplace Report: Microsoft's EU Anti-Trust Deadline

Alex Chadwick talks with John Dimsdale of Marketplace about Microsoft's deadline for abiding by a European Commission anti-trust ruling. The software giant must comply with the ruling or face a fine of up to $5 million a day.

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ALEX CHADWICK, host:

Back now with DAY TO DAY. I'm Alex Chadwick.

Microsoft is facing a deadline to comply with stiff European antitrust rules. The European Commission says Microsoft has been unfairly using its dominance in computer software to keep competitors out, and the company needs to change its ways now. Joining us is John Dimsdale from the "Marketplace" news bureau in Washington, DC.

John, what's at stake here for Microsoft?

JOHN DIMSDALE ("Marketplace"): Well, the EU competition minister last week became somewhat exasperated with Microsoft and gave the company an end-of-the-month deadline to show how it plans to comply with some European rules. Otherwise the EU could start imposing some pretty costly punishment on the company, as much as $5 million a day, and that's on top of a $600 million fine already levied last year. The Europeans are essentially demanding that Microsoft reveal the inner workings of its Windows server software to give other software programmers the ability to make their products work more smoothly in Windows. Windows is the operating system on more than 90 percent of the personal computers around the world.

The European Commission also wants Microsoft to issue a new version of Windows without the Windows Media Player interwoven into the operating system, again so competitors, like RealPlayer or Apple's iTunes, can sell their programs to Windows users.

CHADWICK: John, hasn't Microsoft said that, `Well, OK, we're going to go ahead and comply with these rulings'?

DIMSDALE: They have, although it is under court appeal, so this has been in the courts for some time.

CHADWICK: Yeah.

DIMSDALE: It's similar to the US antitrust case against Microsoft in the late '90s, and like they did in the US case, Microsoft vehemently opposes revealing what they consider to be the company's crown jewels. That's the copyrighted source code for Windows and its interactions with computer servers. Microsoft did issue a Windows version without the Media Player, but they warned potential buyers it might not work. Joe Wilcox, a software industry analyst for Jupiter Research, says Microsoft's been dragging out the negotiations with the Europeans, hoping for a better deal under a new competition minister who's just taken over at the EU.

Mr. JOE WILCOX (Jupiter Research): With a changing of the guard, Microsoft has some hope that it could, at the least, get a settlement from the European Union. Remember that in the US case, we had a changing of the guard here. Bush administration came in, new people at the Justice Department, also a new judge in the case, and suddenly, there was a settlement.

CHADWICK: So, John, this has been a five-year standoff between the Europeans and Microsoft. What now?

DIMSDALE: Well, since it is under appeal, we don't expect a settlement before tomorrow's deadline, because Microsoft has little incentive to give any ground right now. European regulators say they plan to study their options, and they won't decide on the fines until around the end of July.

Coming up later today on "Marketplace," a conversation with famed development economist Jeffrey Sachs about a new plan to end global poverty by 2025.

CHADWICK: Thank you, John Dimsdale, of "Marketplace" from American Public Media.

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