updated 5/31/2005 8:38:32 AM ET 2005-05-31T12:38:32

The European Union head office said Tuesday it expects to make a decision by the end of July on whether to impose new fines on Microsoft Corp. which faces a Wednesday deadline for complying with an earlier order aimed at assuring that rivals can compete to supply accessories for its Windows platform.

EU spokesman Jonathan Todd said EU antitrust regulators hoped to have a decision on new fines “before summer holidays ... before the end of July.” (MSNBC is a Microsoft-NBC joint venture.)

EU officials said Monday that regulators might need several weeks to decide whether to slap Microsoft with huge fines once the Wednesday deadline for the software maker to comply with a landmark ruling expires.

“We’re in regular contact with Microsoft and we have no reason to believe they will not make their final offer before midnight tonight,” Todd said. “It will take time to analyze this proposal. I can’t say whether they’re going to fall into line or not.”

The EU can fine Microsoft up to 5 percent of its daily global sales for each day that a decision is not applied to the EU’s satisfaction.

In March 2004, EU antitrust regulators fined Microsoft a record 497 million euros ($624 million) when they ruled that the company abusively wielded its Windows software domination to lock competitors out of the market.

The Wednesday deadline is for Microsoft to submit a final plan for how it will comply with the EU’s antitrust ruling. If dissatisfied with the response, the EU would then have to send a formal notification to Microsoft and give the company about 10 working days to respond. If still dissatisfied, EU governments and the full 25-member Commission then would have to agree on imposing the fine.

Todd said Microsoft could appeal to the EU Court of Justice, Europe’s highest court.

Both sides worked over the weekend to reach a compromise, talks increasingly centering on pricing and royalties that can be charged to allow software competitors to better dovetail their products with Microsoft’s Windows platform.

The EU requires Microsoft to share, under certain conditions, its Windows server code with rivals to make the industry more competitive in the European marketplace.

Last month, the EU’s regulators were still not convinced the Windows version the company was forced to produce without Media Player was technically up to standard.

During the last high-level contacts last month, EU antitrust chief Neelie Kroes held talks with Microsoft CEO Steve Ballmer at Ballmer’s request to seek a breakthrough in the five-year standoff.

When imposing the June 1 deadline last week, Kroes said it was “the end of the game.”

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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