EU Gives Microsoft June 1 Deadline

Crunch time for Microsoft, the European Union, and litigants such as Real Networks. It will be interesting to see who bluffs, who folds, and who gets the pot. What are we talking about?

The EU is on the verge of deciding that Microsoft has not complied with its monopoly findings of some two years ago, which verdict Microsoft is appealing.

• Microsoft was ordered, and delivered, a version of Windows XP Home without Media Player 9, a bundling no-no according to the EU. Real Networks wants a crack at getting its own player on some OEM machines. Microsoft charges exactly the same price for the media player-less version, which none of the OEMs have ordered. The EU is mulling what the price difference should be, and if it really wants to get into the price setting game, let alone the technology price setting game. My take is Microsoft is right; the value is zero as anyone in the world can download the latest Media Player free at Microsoft.com.
• Licensing terms for third-parties who want to look at Microsoft source code and develop Microsoft-compatible interfaces. This is a big deal for companies like Apple and the Unix/Linux crowd, who need to tie into Microsoft client and server networks. Microsoft has proposed a few thousand dollars a day to look at the source code and from $100 to $800 a server for run-time licensing. The EU is mulling whether this is too stiff a tariff and non-compliant with the EU's directives.

How big is the pot? Well, the EU is blustering about 5% of Microsoft's global revenues. Before you go running for Microsoft's financials, that makes the fine over $5 million -- a day.

My bet is the EU will fold. There is no way the U.S. (president and Congress) will let the Europeans fine a U.S. company $5M a day for this situation.

-- Peter S. Kastner