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Originally published July 8, 2009 at 12:00 AM | Page modified July 8, 2009 at 11:47 AM

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Microsoft trying to resolve 2 EU cases

Microsoft, which has been fined more than $2 billion in European Union antitrust cases, is in preliminary talks to settle two additional...

Bloomberg News

Microsoft, which has been fined more than $2 billion in European Union antitrust cases, is in preliminary talks to settle two additional investigations before EU Competition Commissioner Neelie Kroes leaves office, four people familiar with the negotiations said.

Any agreement would have to resolve a case over Microsoft's Internet browser as well as a separate investigation into word-processing and spreadsheet software, said the people, who declined to be identified because the talks are confidential.

The discussions, which include senior EU and company officials, come after Microsoft canceled a June hearing in the browser case, complaining not enough EU and national competition authorities would be able to attend.

Microsoft rivals Google and Mozilla have received permission from the EU to submit arguments in the Internet Explorer case.

"It's in their interests to settle before the EU has to impose sanctions," said Matt Rosoff, an analyst at Kirkland-based Directions on Microsoft. "That way at least Microsoft has some control over the actions they're going to take if they can agree in private."

Microsoft is trying to settle the investigations before Kroes steps down at the end of the year, the people said. Kroes has said she would try to resolve the case before she leaves.

Declining comment were Jesse Verstraete, a Microsoft spokesman in Brussels, and Jonathan Todd, a spokesman for the European Commission, the EU's administrative branch.

The commission has said it is considering forcing the Redmond company to offer consumers a choice of browsers when setting up a new personal computer on a so-called ballot screen.

Microsoft responded by saying it would ship Windows 7 operating-system software without Internet Explorer to avoid breaking EU law.

Microsoft's offer to separate the browser from Windows might make it difficult for the EU to defend a new fine in court, said Nicholas Economides, a law professor at New York University.

"Microsoft has found a way out of the problem," he said.

"As an enforcer of competition law, you can't always impose what you want. You have to work with what's available under the law. Given the circumstances, I think the EU maybe overplayed its hand," Economides said.

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In the other case, the EU is investigating complaints that Microsoft doesn't provide formatting and other information to allow rival products to work with Microsoft Office software, including Word and Excel.

The commission has fined Microsoft a total of 1.68 billion euros ($2.34 billion) for abusing its market dominance and failing to comply with a 2004 antitrust order.

The company is appealing a fine of 899 million euros ($1.26 billion) for not complying with EU orders in the case.

Any settlement won't free Microsoft from future scrutiny, Rosoff said.

"This is a constant backdrop," he said. "Microsoft is now a heavily regulated company. There's an interesting comparison between Microsoft and a tobacco company."

Copyright © 2009 The Seattle Times Company

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