European Union (EU) regulators have set a deadline of 22 March for their decision on whether Microsoft has been abusing its market position in the market for server and media software.
In the server market, regulators claim that Microsoft has proprietary information that makes its software perform more effectively than software from rivals. The company is also accused of gaining an unfair advantage over rivals and of limiting consumer choice, by bundling its media player with Windows.
According to sources quoted by Reuters, a leaked draft document of the EU's findings outlines a number of sanctions which the EU may try to use curtail Microsoft's power in these markets. Microsoft may be asked to make more of its server code available to competitors, enabling them to improve the quality of their file and print services.
Microsoft may also be asked to find some way of giving manufacturers and consumers a choice of media players. The EU's regulators may even go so far as to demand that Microsoft supply a stripped-down version of Windows without its own media software. This would let suppliers install a rival product, such as media software from RealNetworks, or it may even demand that Microsoft itself offer rival products. Microsoft could also face a fine of hundreds of millions of euros.
The EU's usual strategy is to prepare a strong case, intimidate its target, and then negotiate a settlement. However, Microsoft appears to be digging in for a long fight, as the issue of adding additional value to Windows is central to its business model.
The issue is the same one of consumer choice versus the benefits of integration that lay at the heart of Microsoft's battle with the US courts over bundling of a Web browser within Windows -- although in that case, Microsoft received little more than a slap on the wrist.
In advance of the ruling, there is likely to be much consultation with national governments, with Microsoft and with Microsoft's competitors.
The commission will be hoping that it has managed to draft a ruling that it will stand up in court. Microsoft's first action will undoubtedly be to ask the EU Court of First Instance to suspend the ruling until its long, drawn-out case with the EU is completed in three or four years. The court can agree to this, deny it, or ask the EU and the company to put the case on fast-track, while freezing action in the meantime.