EU Panel Weighing Microsoft Remedies

European regulators have begun discussing proposed remedies to curb what they see as anti-competitive acts by Microsoft Corp., moving one of the largest remaining legal issues facing the software giant a step closer to resolution.

The multinational European Commission’s competition department is debating whether to recommend that Microsoft remove its Media Player software from the Windows operating system and whether to force Microsoft to reveal more about how Windows on personal computers interacts with the company’s software for running computer networks, Reuters reported from Brussels on Tuesday.

Acting on a 1998 complaint by Sun Microsystems Inc., commission officials have accused Microsoft of violating European Union rules. Competition Commissioner Mario Monti has said he expects to issue a recommendation on remedies within a few months.

“We are in a crucial phase in our investigation,” competition bureau spokeswoman Amelia Torres said Tuesday.

Torres declined to comment further, but analysts and companies tracking the proceedings said the remedies fit with what had been anticipated.

“Things seem to be progressing over there pretty much as expected. There are no wild stories of them wanting to break up the company,” Goldman Sachs analyst Rick Sherlund said.

Unbundling the media player would help Real Networks Inc., Microsoft’s chief rival in making video and music software. But it wouldn’t cause substantial harm to Redmond, Wash.-based Microsoft, analysts said.

Disclosure of how Microsoft-powered personal computers link up with Microsoft-run server computers is potentially more thorny. The commission said that by failing to reveal how those connections work, Microsoft has used its dominance on desktop computers to gain an unfair advantage over server rivals, including Sun.

Last year’s settlement between Microsoft and the Justice Department requires Microsoft to disclose some details on the server interactions, but competitors complain the conditions under which those disclosures are offered are too onerous.

The EU is likely to be “a little bit more aggressive than the Justice Department” on forcing disclosures, said analyst Charles Di Bona of Sanford Bernstein. “The devil is going to be in details.”

Microsoft has signaled a desire to settle the European charge. Monti’s recommendation could set the stage for bargaining.

Still pending in U.S. courts are private antitrust suits against Microsoft by Sun, AOL Time Warner Inc. and others, along with an appeal of the Justice Department’s settlement.