EU Plans to Announce Its Fine on Microsoft

A formal European Union decision to fine Microsoft Corp. and force it to change how it does business across the Atlantic is due to be announced Wednesday.

European Competition Commissioner Mario Monti is expected to order the company to offer two versions of its Windows operating system: one with software for audio and video, and one without.

However, Microsoft can appeal the order to Europe’s Court of First Instance in Luxembourg -- a process that can take two to three years.

The fine against Microsoft -- possibly hundreds of millions of dollars -- will be formally discussed with an EU panel today.

Microsoft, which has spent years fighting charges that it uses its dominance in operating systems to crush competitors, underscored the importance of this case when Chief Executive Steve Ballmer flew to Brussels to negotiate personally with Monti last week. That effort failed.

A number of U.S. companies stand to gain from tough decisions reining in Microsoft’s business practices. One is RealNetworks Inc., a rival maker of software.

“The bottom line is that this isn’t the U.S. versus Europe. This is Europe legitimately protecting European consumers. There is a lot of support in the U.S. for what the commission is doing, which is completely consistent with U.S. antitrust law,” said Dave Stewart, deputy general counsel for RealNetworks.

The Justice Department, which settled its antitrust case against Microsoft in 2002, has been subdued in its reaction to the EU’s moves. The U.S. settlement with Microsoft has not been without controversy.

Massachusetts, for example, has been one of the strongest critics.

In fact, a U.S. appellate court ruling is expected to decide whether sanctions in the settlement that were approved were in fact adequate.

Massachusetts has been pressing for tougher penalties against Microsoft.