EU Blinks. Microsoft Penalties Deferred.

The risk that the EU executive might hit the world's largest software company with a fine of up to $5 million a day receded because Microsoft's proposal allows non-Microsoft work group servers to interoperate with Windows personal computers and servers.

The plan will be put to industry peers for their opinion over the next two weeks of market testing before the Commission makes a final assessment, but an open-source software group that is a major rival raised immediate objections.

The Commission postponed the most troubling questions about open-source licenses until an EU court rules next year on Microsoft's broad challenge against its antitrust decision.

We predicted this result here a couple of weeks ago.

-- Peter S. Kastner