In an effort to reach a settlement with European regulators, Microsoft's chief executive, Steven Ballmer, met with Europe's top antitrust official, Mario Monti, on Tuesday, just over a week before regulators are expected to find that Microsoft abused its dominance in operating software.
Talks broke off early Tuesday evening and were expected to resume either face-to-face or by phone yesterday, according to people close to the talks.
Monti's spokeswoman, Amelia Torres, told reporters: "There's been a meeting today. Discussions are ongoing. That's all I'll say."
As Jack Welch of General Electric did in an earlier high-profile European antitrust case, Microsoft's chief executive faced Monti in the regulator's modern office building here.
Welch tried unsuccessfully in 2001 to win approval for his company's US$45 billion acquisition of Honeywell International. Ballmer is here to try to avert a ruling by the European Commission that would brand Microsoft an abusive monopolist, and could open the company up to similar legal challenges elsewhere in the world.
Ballmer's arrival on Tuesday was seen by some as a sign that settlement talks were nearing a conclusion.
"It indicates that the issues have narrowed sufficiently to bring in the principal characters," a person close to the company said.
The biggest obstacle to a settlement is the bundling of Microsoft's audio and video playing program Media Player into its Windows operating system.
The European Commission believes that selling the two programs together is anticompetitive because of the dominant position of Windows. Media Player has an unfair advantage over rival players such as Real Networks Real One player and Apple's Quicktime because it is automatically installed on over 95 percent of all personal computers, according to the commission.
If Ballmer fails to reach a settlement Monti is expected next week to order Microsoft to offer two versions of Windows to PC manufacturers in Europe, one with Media Player stripped out.
Microsoft is also accused of obstructing fair competition in the market for server software. Servers run networks of PCs and need to communicate with PCs constantly.
The commission contends that the way to restore competition is for Microsoft to disclose enough of the secret code in Windows to rival server software makers, like Sun Microsystems, so that their software works as smoothly with Windows as Microsoft's own server program.
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