EU Official: Microsoft Settlement Talks Continue

"We are engaging in formal discussions and settlement discussions," Philip Lowe, the director general of the Commission's competition department, told Dow Jones Newswires on the sidelines of a conference.

"The formal proposals will have to be put to the (EU) member states in the next fortnight and then the Commission will have to make a decision."

European regulators have set March 15 and 22 as the dates for final reviews in Brussels, where representatives of antitrust offices in the 15 EU countries comment on the decision and proposed penalties. The Commission usually adopts the decision a day or two after the last closed-door session.

Sources familiar with the case have said the draft ruling finds the U.S. software giant abused its dominant position with Windows to gain market share in markets for multimedia players and low-end servers. It would impose a fine and order the company to stop breaking the law.

The sources have said the EU wants to force Microsoft to offer computer makers a version of Windows without its own Media Player to give rival companies a better shot at getting their products on consumers' desktops. It also would demand Microsoft release more information to improve "interoperability" with Windows for rival server networks.

Microsoft, Redmond, Wash., would likely challenge such an order in European courts. The company insists removing its Media Player program would compromise other parts of its flagship operating system.

Taking out Media Player also could undermine Microsoft's long-term strategy of keeping Windows on top by incorporating new functions, which it argues benefits consumers.

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