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Tech Almanac

EU Agrees To Stay Microsoft Penalties
Court Hearing Due Later This Summer

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_____More About Microsoft_____
Microsoft Appeals EC Ruling (The Washington Post, Jun 9, 2004)
Microsoft, Fairfax Firm Settle Suit (The Washington Post, May 26, 2004)
Suits Dilute Microsoft's Big Gains (The Washington Post, Apr 23, 2004)
Microsoft Ruling Cites 'Pattern of Conduct' (The Washington Post, Apr 22, 2004)
Microsoft's Innovation: 2004 and Beyond (Live Online, Apr 15, 2004)
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By Jonathan Krim
Washington Post Staff Writer
Monday, June 28, 2004; Page A13

European regulators have agreed to temporarily hold off on forcing Microsoft Corp. to change its business practices until a court hearing later this summer, a company spokesman confirmed yesterday.

The decision by the European Commission, following its ruling in March that Microsoft broke European Union antitrust laws, was largely a formality. Microsoft, based in Redmond, Wash., is appealing the ruling, which levied a fine of more than $600 million and would force the company to sell a version of Windows operating system without programs for playing digital video and music.

Late Friday, Microsoft asked the court to delay all penalties while it appeals, a process that could take years. The decision announced yesterday puts the penalties on temporary hold until the court can decide whether to suspend the sanctions for the duration of the appeals. Had the regulators not acted, those sanctions would have taken effect today.

Microsoft is accused of illegally using its Windows monopoly to squeeze out rival makers of software for playing digital entertainment. Because the Windows Media Player is distributed with the ubiquitous Windows, European regulators charge, other media player developers, such as Real Networks, are at an unfair disadvantage.

The European Commission, which is the executive arm of the EU, wants Microsoft to offer two versions of Windows in Europe -- one with its own media player and one without. They hope this will encourage computer makers to seek deals from other media player companies to bundle their software with new machines.

Microsoft argues that removing its media player from Windows will degrade the operating system, and that there is significant competition from other media players, including Apple Computer Corp.'s iTunes.

Microsoft also is accused of trying to squeeze out rivals in the market for server systems, which power computer networks, by making it harder for competing software to work well with Windows. Microsoft denies these charges as well.

None of the court filings in Europe are made public, so the substance of the appeal was not known yesterday.


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