As yet, there has been no official ruling against Microsoft. But the International Herald Tribune last week claimed that a draft ruling recommends that Microsoft should be fined. This week, German newspaper Die Welt claims that the fine will be €100 million.
The European Commission has the power to fine the company up to 10% of its global turnover for abusing its dominant position. Its revenues totalled $32 billion in the last fiscal year. So a fine of €100 million – or US$125 million – would represent less than 0.4% of that figure.
In its last quarter, Microsoft reported record revenues of $10 billion, or more than $100 million per day. In addition, the company has enormous cash reserves - last year it reported reserves of $49 billion.
A finding against Microsoft would come as no surprise, nor would the imposition of a fine.
The Commission has been investigating Microsoft since 1998, when competitors accused the company of failing to disclose hardware specifications necessary to integrate non-Microsoft software into corporate networks.
The long-running investigation began drawing to a close in August last year, when the Commission issued a preliminary finding that Microsoft's practices in Europe were anti-competitive. At that time, Tilman Lueder, a spokesman for the Commission said: "We are minded to impose a fine for the past and minded to impose remedies for the future, and we will adopt a final decision which does exactly that."
The Commission then gave the company a final chance to make its case.
Microsoft filed these arguments in November. The bulk of its defence focused on allegations that it is leveraging its dominant position from the PC into low-end servers and that Microsoft's tying of Windows Media Player to the Windows PC operating system is anti-competitive.
The Commission has already indicated that it is prepared to order that Microsoft reveal source code to allow rivals such as Sun Microsystems to achieve full interoperability with Windows PCs and servers, and thus – at least in theory– compete on a level playing field.
With respect to tying, the Commission has set out two alternative proposed remedies. The first would be the untying of Windows Media Player from Windows, whereby Microsoft would be required to offer a version of Windows without Windows Media Player included. This is a normal remedy for a tying infringement.
The second would be a "must-carry" provision, whereby Microsoft would be obliged to offer competing media players with Windows. Both solutions seek to ensure that consumers have a fair choice of media players.
An official ruling is not expected until the Spring. In response to last week's rumours of a decision going against Microsoft, European Competition Commissioner Mario Monti confirmed that a draft decision has been reached, but he refused to reveal its details.
According to Reuters, Monti told reporters that a settlement was still possible: "We are not against a settlement if that is clearly in the consumer interest, but time is running out".