EU regulators to discuss EC’s Microsoft ruling

Competition regulators from the 15 European Union (E.U.) member states will gather in Brussels Monday to discuss the European Commission’s negative draft ruling against Microsoft Corp.

The draft ruling brands the company an abusive monopolist for the way it used its ubiquitous operating system, Windows, to stifle competition in the markets for video and music playing software and server software, according people close to the case.

In order to restore competition in the first market, the Commission wants Microsoft to sell two versions of Windows to PC manufacturers: one with its Media Player stripped out, as well as the existing version that has Media Player bundled into the operating system, people said.

To redress the balance in the market for server software, which drives PC networks, the Commission wants Microsoft to reveal enough of the secret code in Windows to allow rival server software makers to design products that work equally well with Windows on PCs as Microsoft’s own server software.

The regulator is expected to ask Microsoft to decide what needs to be revealed. It will ask the Redmond, Washington, company to report back within two or three months of the ruling — expected on Mar. 24 — with specific proposals. The Commission would then ask rivals whether what Microsoft has offered is enough to restore competition, according to people close to the case.

There is still a small chance that Microsoft may reach a settlement with the Commission, thus averting a negative ruling, but time for such a solution is rapidly running out.