updated 3/19/2004 10:35:00 AM ET 2004-03-19T15:35:00

The past belongs to Microsoft and no one else can have it. Mario Monti, antitrust chief of the European Union, wants the future, but Microsoft is not ready to concede it.

This is pretty much how the long-running Microsoft antitrust battles have run. Microsoft gains control of a market, claims are made that Microsoft's control was derived from its abuse of its monopoly of the operating system market, Microsoft says it needs freedom to innovate, the authorities investigate, find there is a monopoly and some form of abuse, and the hard question is what to do next. (MSNBC is a Microsoft-NBC joint venture.)

Microsoft has failed again to reach a final settlement with antitrust regulators, this time from the European Commission, and it looks like there will be an antitrust ruling next week that — if form holds — will label the company an abusive monopolist. The company faces a fine and an order that it offer a version of its Windows operating system without its Media Player software, with the idea being rival software firms will now have a fairer shot at the audio-visual software market.

Talks that included Microsoft Chief Executive Steven Ballmer traveling to Brussels broke down despite a reported agreement between Microsoft and the European Commission on a plan that would have resolved current antitrust complaints against the company. But Microsoft would not concede to a wider understanding that would have restricted the future incorporation of programs and features into Windows, the company said.

Microsoft has always said it must have the right to put what it wants in Windows, while its critics have said that right, plus its failure to properly share information about how Windows works, is the essence of its unfair advantage and its ability to encroach on other segments of the software market.

"I believe we reached agreement on the issues of the case. But we were unable to agree on principles for new issues that could arise in the future," Ballmer said in a statement.

While everyone agreed the talks were excellent ("a cooperative spirit," Ballmer raved) they ended without a deal. "I'd just like to inform you that a settlement on the Microsoft case has not been possible," Monti said, as in what was described as a surprise appearance at the EU executive's daily news briefing.

Microsoft said it was willing to address the Commission's concerns about interoperability and Media Player technology. The deal reportedly would have required Microsoft offer media products by Apple Computer or Real Networks on something like equal footing. But Monti wanted an arrangement encompassing the integration of other software products in the future. Microsoft balked and said there was no single formula to do that, and that the future should remain in the future.

"We have to ensure that the law is not just about competitors' complaints about the impact of new features. There needs to be consideration of the needs of consumers for new innovations. Consumers must be part of the equation. Perhaps the courts will provide the clarity that is necessary to resolve these issues," said Bradford Smith, Microsoft's general counsel. "Today is just another step in what could be a long process."

Monti's goal was to shorten or even end that process with a general theory of bundling. He said he was for the consumers, too. "In the end, I had to decide what was best for competition and consumers in Europe," he said in a statement. "I believe they will be better served with a decision that creates a strong precedent."

With talks ended, the commission is expected to proceed with a ruling against the company next week. Monti will propose an order changing the way Microsoft does business plus a fine. Microsoft will be able to challenge the ruling in court, and it could still settle claims at a later stage. That's what it did with the U.S. Justice Department — but not until after an appeals court decision confirming the company had acted illegally, but rejecting the remedy that it be split in two.

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