Microsoft's last-ditch EU antitrust talks collapse

Microsoft's last-ditch talks aimed at reaching a settlement with the EU and avoiding antitrust action have failed, paving the way for a landmark legal ruling next week.

Microsoft CEO Steve Ballmer had flown in earlier this week for talks with the EU Competition Commissioner Mario Monti.

But those talks collapsed today and Monti said in a statement that agreement had not been possible on commitments for Microsoft's future conduct.

"A settlement to the Microsoft case has not been possible," he said. "In the end I had to take a decision as to what was best for competition and consumers in Europe. It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position in the market."

If the talks had been successful it would have meant Microsoft agreeing to change the way it conducts its business in Europe in order to avoid a legal finding against it that could make any future antitrust lawsuits easier to pursue.

Instead the EU is now set to sanction a massive fine with a formal legal ruling on 24 March that will say Microsoft illegally abused its dominant market position in operating systems to give it an advantage over other media player software firms.

In essence that means Microsoft could be forced to open up its proprietary top secret Windows source code to rivals as well as providing an alternative 'stripped-down' version of the operating system that doesn't come with media software bundled in.