BRUSSELS -- Microsoft's chances of settling its European antitrust case are fading, as officials at the European Commission are circulating a draft ruling to colleagues that finds the company guilty of abusing the monopoly power of Windows, people close to the Commission say.
The draft ruling says that Microsoft's failure to grant rivals access to Windows code, which runs on over 95 percent of the world's PCs, is an abuse of the company's dominant position. The document proposes ordering Microsoft to reveal the code to rivals, says one person on condition of anonymity.
The Commission is the European Union's executive body. It heard the case last fall.
Other Transgressions
The source says the draft ruling also finds Microsoft guilty of stifling competition in the media-playing software market. The company bundles its own Media Player software into Windows, giving it an advantage over rival products such as RealNetworks' RealPlayer.
However, the person says the draft ruling stops short of demanding the total separation of Media Player from Windows.
"The Commission doesn't appear to be pushing for the total unbundling of Media Player from Windows," the source says.
Instead, the Commission is expected to order Microsoft to offer a version of Windows without Media Player included, alongside the bundled version currently on sale.
The draft ruling proposes the EU fine Microsoft breaking European antitrust laws. However, the fine's amount won't be decided until the week before a final vote to issue the ruling by the Commission's 20 members. Their vote is expected in March or April.
The European action is separate from the antitrust settlement Microsoft reached with the U.S. Justice Department in 2002. However, the company has recently been accused of not meeting the terms of that deal.
Negotiations Continue
Microsoft says it is still looking for a settlement. The firm's lawyers are still "engaged" in talks with the European regulators, says Jim Desler, a Microsoft spokesperson. However, people close to the Commission say the chances of reaching an agreement are slimmer now that a draft ruling exists.
"Time is running very short for Microsoft," one observer says, adding that the draft ruling triggers a series of final legal steps that must be completed before the final vote. "There is little room to stop that process."
Microsoft has indicated it will appeal a negative ruling to the European Court of First Instance in Luxembourg, a process that can take years to complete. Negotiations are likely to continue while the courts assess Microsoft's appeal. Any remedies imposed on Microsoft may not take effect until after an appeal is completed.
A person close to the Commission says it would be to the EU's advantage to continue talks with Microsoft after an antitrust ruling.
"They would be negotiating from a stronger position with a ruling behind them," the source adds.
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