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Antitrust chief in Europe seeks to close cases

Neelie Kroes, the European antitrust chief, has signaled that a settlement is within reach in the long-running case against Microsoft.

Neelie Kroes
Credit: European Commission
Neelie Kroes

BRUSSELS--Two months before her term expires, Neelie Kroes, the European antitrust chief, has signaled that a settlement is within reach that could end one of the most contentious disputes of her tenure--the long-running case against Microsoft.

European officials have in recent weeks been market-testing an offer made by Microsoft in July that would give European computer users a choice of Web browsers when setting up the next version of its Windows operating system.

With the pace of negotiations accelerating, Kroes said in an interview on Monday that she was eager to reach a deal. But she indicated that her legal team was carefully examining the fine print to make sure it meets all necessary conditions.

"I would be pleased if we could close that dossier," Kroes said about her battle with Microsoft--a series of rulings that has resulted in 1.2 billion euros, or $1.8 billion, in fines against the company since she took office in 2004. But she said she wanted a solution that she could "present to the outside world" and that would enable her to tell consumers "that indeed competition is there."

Ahead of a visit to the United States this week, Kroes also said she would discuss with her United States counterpart antitrust issues involving Google, another technology giant with a powerful market position. And she underlined the importance of trans-Atlantic cooperation in creating the "transparent and predictable competition policy" that she thinks globalization requires.

Attempts over the years by the European Union and Microsoft to settle the case failed, resulting in a 2004 ruling against the company, upheld on appeal in 2007. Microsoft had also fought earlier attempts to open Windows to another competing browser, Netscape, in the United States.

This July, however, facing new charges in Europe, Microsoft offered to alter Windows to give users of new computers in Europe a ballot screen that would let them easily download other browsers from the Internet and turn off Microsoft's default Internet Explorer. The proposal also would address outstanding issues about the way Microsoft systems connect with competing systems.

Legally, Kroes can only impose changes that apply to what companies do within Europe. But as a practical matter, a global company like Microsoft might apply some of the changes required in Europe to the rest of the world to ease sales and distribution.

Microsoft said on Monday that it understood the commission was evaluating its offer. "We continue to look forward to the next steps in this process," said Jesse Verstraete, a Microsoft spokesman.

The next few weeks will determine whether Kroes wins reappointment to the European Commission for another five-year term. The chief obstacle is that her free-market party is no longer part of the governing coalition in the Netherlands.

In the meantime, she said she wanted to clear up all the significant cases under her watch, including a long-running investigation into Qualcomm.

"I want to clean up all the shelves," she said. "The less there is left, the better it is."

Kroes, who will be in New York this week for an antitrust conference, said she expected Google to be raised by her counterpart at the Justice Department, Christine Varney.

The company has been under scrutiny on both sides of the Atlantic for practices ranging from book scanning to news aggregation to the sharing of board members with Apple.

"Let me find out what she's doing," she said, adding that they spoke frequently by telephone. "She is a very good, and tough, cookie."

Kroes herself has burnished a reputation as "Steely Neelie." Inside her office that tough image is reinforced by the presence of a cube-shaped, metallic sculpture of prickly rose thorns, and a brick on her conference table with the word "no" inscribed on it.

Yet Kroes also oozes Dutch informality and pragmatism, greeting guests personally outside of her office and priding herself on her real-world business experience. She sat on numerous corporate boards before becoming a commissioner.

She inherited the competition job at a time when European enforcers were being criticized in the United States and elsewhere for seeming to be more concerned with protecting competitors than the interests of consumers. That appears to be changing, she said.

"What I recognize is that the U.S. is putting more emphasis on consumer issues," she said. "We are coming closer to each other."

President Obama's message that "antitrust is really important," after what was seen by critics as a lax attitude during the Bush years, was helping in "binding our efforts," she added.

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