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EU threatens big fines for Microsoft

Org says co. a monopoly, eyes changes to Windows

BRUSSELS — European Union regulators warned Microsoft on Wednesday that it could face fines of up to 10% of its global turnover — equivalent to $2.75 billion — for alleged anti-competitive behavior.

Microsoft is still committing the monopoly abuses it was first accused of in 1998, EU watchdogs said in a preliminary ruling in its four-year antitrust case against the company.

“We are determined to ensure that the final outcome of this case is to the benefit of innovation and consumers alike,” EU competition commissioner Mario Monti said.

He said Microsoft would have “a last opportunity to comment before we conclude the case.”

The EU wants changes made to the Windows operating system. One of the regulators’ main points was that including Microsoft’s video-playing software, Media Player, in the Windows package “weakens competition on the merits, stifles product innovation and ultimately reduces consumer choice.”

They suggest selling Windows without Media Player or with a choice of video-playing software, including those of competitors.

Brussels also has decided Microsoft used its dominance in the PC market to gain leverage in the server market. It wants Microsoft to reveal all the software code that competitors would need to make their server systems as compatible with Windows as Microsoft’s own server software.

The EU could force Microsoft to alter its business practices and slap it with the hefty fine, the size of which won’t be decided until weeks before a final ruling, expected in the next few months.

Microsoft continues to settle disputes arising out of a landmark antitrust lawsuit in the U.S., on Wednesday agreeing to pay $10.5 million to as many as 500,000 customers who alleged they were overcharged for single copies of Windows they bought from Microsoft.