updated 6/6/2005 11:22:04 AM ET 2005-06-06T15:22:04

Microsoft Corp. said Monday it made “tough concessions” in changes it proposed to ensure its Windows software complies with European Union antitrust rules.

As the EU head office started testing the changes, the U.S. software giant said it agreed to a new royalty structure on the licensing of Windows codes. It also said it agreed to make the new interoperable Windows product available to consumers around the world. (MSNBC is a Microsoft-NBC joint venture.)

Microsoft CEO Steve Ballmer said the company made the alterations to resolve a standoff with EU regulators that has dragged on for some five years.

“In order to resolve some complex issues over the past few weeks, we’ve made some tough concessions,” Ballmer said, adding that Microsoft takes its responsibility to carry out the ruling “very seriously and will to continue to focus on fulfilling all our obligations in every way we can.”

The company acknowledged it would give rival companies free access to some of its software codes and allow full operability on its Windows based servers, the commission said.

The EU head office said the proposed alterations were to be put to Microsoft’s rivals “to assess them in full,” making sure they allow for more interoperability. The testing will last for two weeks, EU spokesman Jonathan Todd said.

“The commission will then decide in light of market testing whether or not it considers Microsoft is in compliance,” Todd said. That is expected by the end of July.

If EU regulators find the changes don’t go far enough, they could call for sanctions on the company of up to 5 percent of its daily global sales.

The EU fined Microsoft 497 million euros last year and said the company abusively wielded its Windows software domination to lock competitors out of the market. It ordered Microsoft to share its Windows server code with rivals under certain conditions to make the industry more competitive in the European marketplace.

Microsoft met an EU deadline last week to answer complaints from EU regulators that it was not fully complying with the ruling. Those replies are being studied, officials said.

Both the EU and Microsoft refused to divulge the content of the proposals.

During the last days of talks, however, negotiations centered on pricing and royalties that could be charged to allow software competitors to better dovetail their products with the Windows platform.

Last month, the EU’s regulators were still not convinced the Windows version the company was forced to produce without its Media Player was technically up to standard, however Todd said no new testing was planned on this issue.

Todd said Microsoft had agreed to make its software easier to operate with rival addition programs like video or audio players, and to make the new interoperable Windows product available around the world, instead of limiting the changes to Europe, as it previously proposed to do.

Officials said Microsoft also acknowledged that part of its changed open-source software will have to be royalty-free.

EU Competition Commissioner Neelie Kroes said she remained “determined to ensure that all elements of the (2004) decision are properly implemented.”

“This includes the ability for developers of open-source software to take advantage of the remedy,” Kroes said.

Todd added that the two sides have yet to decide on an independent referee, whose job it will be to ensure that Microsoft is complying with the EU ruling.

“We have not agreed on a name,” Todd said. “We hope that Microsoft will come forward with acceptable candidate very shortly. We are expecting to involve the trustee in assessment of market testing.”

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


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