Microsoft faces $5m per day fines

Time runs out for Microsoft this week after an antitrust ruling by the European Commission: it must either comply or face possible fines up to $5m per day.

The Commission, which polices competition in the 25-nation European Union, fined the US software giant a record €497m ($654.9m) on 24 March, 2004, and ordered it to change the way it does business.

Microsoft went to court to try to put off the remedy but lost. By that time Microsoft's time to comply had long run out but the company continued to delay, to the increasing consternation and frustration of the Commission.

That all is supposed to change on 1 June.

European competition commissioner Neelie Kroes said last week in Madrid: "The deadline is the end of this month and if it's not met then it's the end of the game."

Microsoft must make its ubiquitous Windows operating system available without Windows Media Player, so computer makers could buy alternative software, to play films and music, from Apple and RealNetworks.

The company must also share information with rival makers of servers used to run printers and retrieve files, an issue known as interoperability. The company was also supposed to propose a trustee to monitor its compliance.

Kroes met Microsoft CEO Steve Ballmer in May and discussed the situation with him.

"We made a deal that before the end of the month we would reach an agreement. We are waiting for the Microsoft people to do their homework," Kroes told Reuters last week.

As a practical matter, that means that Microsoft must put in its final proposal to comply with requirements by Wednesday and the Commission may take some time to consider whether it complies.

The Commission could fine Microsoft up to $5m daily for failure to comply with the sanctions imposed on it. But that would require it to open a special proceeding with charges and a decision by the Commission.

However, there is little to decide and the Commission has full authority to judge whether its ruling is being followed.

Some experts speculate that the decision to fine could come by the August recess of the Commission.

Microsoft has said it working hard to cooperate with the Commission.

Mike Ricciuti writes for CNET News.com