Microsoft says on track to resolving EU situation

Microsoft Corp is on track to resolve this month its fight with European Union regulators over its compliance with a 2004 antitrust ruling, the software company's general counsel said today.

Earlier in the day, the European Commission fined Microsoft 280.5 million euros ($590.9 million) for not providing adequate technical documentation to rival server software makers, a stipulation of its antitrust decision against Microsoft in March 2004.

The watchdog also warned that failure to provide acceptable documentation would result in bigger fines in the future.

Microsoft, the world's largest software maker, said it is encouraged by the feedback from European regulators about the latest batch of technical documents and hopes the issue can be resolved by the end of July.

"Everybody appears to agree that we're finally on the right track to getting the technical document done," Brad Smith, Microsoft's general counsel told Reuters in an interview.

"If we can continue on the path we've been on, then we should be in a position to hopefully bring this chapter to a close and hopefully get our relationship with the European Commission back to a more normalized state." Based on its optimism about its ability to meet the Commission's requirements, Smith said Microsoft does not see any need to change how it conducts business in Europe or bring in engineers to alter products it offers in the region.

Smiith said the company has 300 engineers working around the clock to complete the documentation project by July 18 and then field questions and concerns from European regulators before the end of the month.

Smith, who is also a Microsoft senior vice president, said the company plans to appeal the ruling, but will announce the financial impact related to the fine on July 20 when the company announces quarterly results.

"There's nothing you would have found in our prior quarterly releases that would have reflected this amount, because it would have been premature. So we will have to take account of this," said Smith.

Still, most investment analysts said the fine will have little financial impact on Microsoft, which has a cash reserve of US$35 billion ($57.5 billion) and regularly generates more than US$1 billion in free cash flow a month.

Shares of Microsoft fell 46 cents to US$22.64 on Wednesday.

- REUTERS