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Settlement Likely In Microsoft-EC Antitrust Cases

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It appears increasingly likely that Microsoft (NSDQ: MSFT) will finally settle its long-standing litigation with the European Commission. The EC has agreed to “market test” a Microsoft offer to include a ballot screen on new PCs so that users can easily choose to install a browser other than Internet Explorer if they wish; PC manufacturers and users will also be able to switch Internet Explorer completely off. Depending on the results of the test, the EC expects to make the terms binding on Microsoft for the next five years. The EC had initially said in January that it believed Microsoft had violated antitrust law by bundling Internet Explorer and Windows together — and its statements today imply that it believes Microsoft has now responded appropriately to its concerns.

A second source of contention between the EC and Microsoft — how Microsoft’s products work with those of its competitors — also seems headed towards a resolution. Microsoft says it will let developers access technical documentation so that they can more easily build interoperable products. The EC says in a statement that it “welcomes” that proposal.

Microsoft initially laid out both offers in June, although there were questions about whether the EC would accept them. The WSJ reported in late September that rivals had objected to Microsoft’s browser proposal — which it said could complicate settlement talks. In a statement, Microsoft says it made changes to its proposal in response to feedback. For instance, the ballot screen will list popular browsers in alphabetical order, meaning that Internet Explorer will be in the middle of the pack, instead of first.

Microsoft is calling the EC’s decision a “significant step toward closing a decade-long chapter of competition law concerns in Europe.” And, at least financially, this is likely a big win for Microsoft, which had previously paid more than $2 billion to settle EC investigations earlier this decade. Microsoft had initially said that it expected it would have to pay a “significant fine based on worldwide sales of Windows operating systems” in the browser case — but none of the statements issued today mention a financial penalty of any sort.