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Microsoft agrees to comply with EU antitrust decision
2007-10-22 09:34:47 Xinhua English

BRUSSELS, Oct. 22 (Xinhua) -- The U.S. software giant Microsoft has agreed to fully comply with an antitrust decision by the European Union (EU) in 2004, hopefully closing a chapter in a nearly decade-old battle, the European Commission announced on Monday.

"I want to report to you today that Microsoft has finally agreed to comply with its obligations under the 2004 commission decision," the EU Competition Commissioner Neelie Kroes told reporters.

Microsoft will now take the necessary steps to comply with its obligations under the Commission's 2004 decision regarding work group server operating systems, including making interoperability information available to "open source" software developers, the commission said in a statement.

The interoperability information will allow software developers to make their programs work smoothly with Microsoft's Windows operating system.

In its 2004 decision, the EU's antitrust watchdog ordered Microsoft to supply competitors in the work group server operating system market with interface information necessary for their products to interoperate with its Windows operating system and untie Windows from its own Media Player product.

The commission also fined Microsoft a record 497 million euros (about 686 million U.S. dollars) for the company's abuses of market power.

Though Microsoft paid the fine and released a Windows version without Media Player on the European market in 2005, but it was found by the European Commission to be in continuous failure to supply interoperability information, which incurred a second fine of 280.5 million euros (about 398.3 million dollars) in 2006.

Earlier in March, the commission issued a new warning against Microsoft of further penalties of up to 3 million euros (about 4.2million dollars) per day over its unreasonable pricing of the interoperability information.

The commission said Microsoft finally agreed to three substantial changes to comply. First, "open source" software developers will be able to access and use the interoperability information. Second, the royalties payable for this information will be reduced to a nominal one-off payment of 10,000 euros (about 14,200 dollars).Third, the royalties for a worldwide license including patents will be reduced from 5.95 percent to 0.4percent -- less than 7 percent of the royalty originally claimed.

In the agreements between third party developers and Microsoft, Microsoft will guarantee the completeness and accuracy of the information provided. The agreements will be enforceable before the High Court in London, and will provide for effective remedies, including damages, for third party developers in the event that Microsoft breaches those agreements.

"As of today, the major issues concerning compliance have been resolved," Kroes said.

But she warned the commission will remain vigilant to ensure that Microsoft continues to respect its compliance obligations and does not engage in other anti-competitive behavior.

"Should Microsoft fail to comply with those obligations in the future the commission can issue a new decision to impose daily penalties," the commission said in a statement.

Concerning the March threatening of further fine, the commission said it would adopt a decision as soon as possible, adding Microsoft was still liable for its non-compliance before Oct. 22.

Microsoft's concession came after the European Court of First Instance, the EU's second-highest court, upheld the commission's decision last month, a heavy blow to the software giant's long-time defiance.

Although Microsoft can still appeal the ruling before the European Court of Justice, the EU's highest court in Luxembourg, it had not made any formal indication of its intention.

Kroes said she expected Microsoft will give up its right to appeal since it agreed to fully comply, but a decision should be Microsoft's.

Monday's announcement may close a chapter in the nearly decade-old wrangle between the EU and Microsoft, which began with a complaint to the commission by the U.S. software company Sun Microsystems in 1998.

"I sincerely hope that we can just close this dark chapter," Kroes said, "I feel a bit sad because it took so long, it took so many years, and during those many years consumers suffered from the fact that Microsoft did not go along with what the commission asked it to do."

Analysts said the result would substantially change Microsoft's way of doing business, especially preventing the software giant from exploiting its dominant position in the operating system market through unfair practices such as tying new features with Windows.

"Now that Microsoft has agreed to comply with the 2004 decision, the company can no longer use the market power derived from its 95percent share of the PC operating system market and 80 percent profit margin to harm consumers by killing competition on any market it wishes," Kroes said.

Microsoft's new operating system Windows Vista has aroused separate antitrust concerns from the EU since it integrates features such as security software, Internet search and digital rights management tools.

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