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Microsoft's EU deadline looms

Company must submit on Tuesday its final proposal for complying with the antitrust order from the European Commission.

Microsoft must submit on Tuesday its final proposal for complying with an antitrust order from the European Commission--or face fines that could reach millions of dollars a day.

The Commission, which polices competition in the 25-nation European Union, fined the U.S. software giant 497 million euros ($613 million) on March 24, 2004.

Microsoft also was ordered to make its ubiquitous Windows operating system available without the Windows Media Player, so that computer makers can buy alternative software to play video and audio from competitors such as RealNetworks and Apple Computer. The software giant must also share information with rival makers of servers used to run printers and retrieve files, so that Microsoft's system will work with software products from other companies.

European antitrust regulators, who have been at odds with Microsoft over its efforts to comply with its order, hope to make a decision by July 20 as to whether Microsoft has submitted an acceptable proposal for compliance, said Jonathan Todd, a spokesman for the European Union. That date is the last meeting of the European Commission before its summer recess.

Microsoft must submit its final proposal--including a copy of Windows sans the Media Player--to European Competition Commissioner Neelie Kroes by 3 p.m. Pacific time (midnight in Brussels, Belgium). Kroes will then share that information with third parties in the case.

"We will give them a copy of Microsoft Windows without the Media Player and a copy of the proposed terms...Their input will be taken into account on whether Microsoft is in full compliance or not with the March 2004 order," Todd said, citing an example of how Microsoft competitors and industry players will participate in the EU's decision.

Kroes will either accept or reject Microsoft's proposal. If she rejects it, she will ask the full commission to issue a decision to impose a fine of up to 5 percent of daily global sales, Todd said.

That would be a first for the European Union's antitrust regulators. Before May 1, the harshest penalty that could be imposed was 5,000 euros ($6,179) per day, Todd said.

Kroes met with Microsoft CEO Steve Ballmer in May to discuss the situation. "We made a deal that before the end of the month we would reach an agreement. We are waiting for the Microsoft people to do their homework," Kroes told Reuters last week.

Microsoft has said it working hard to cooperate with the Commission.

Reuters contributed to this report.