As you have doubtless seen, over the past few days there has once again been heightened interest in our legal dispute with the EU, therefore I wanted to take this opportunity to fill you in on some specifics.

This particular peak in interest comes after a very long process of close co-operation between Microsoft and the European Commission on a number of issues and I wanted to give you some substantive background to complete the picture you may have received from the press.

First and foremost, these latest developments do not concern our appeal of the EU's 2004 decision. As you know, back in March 2004 we were fined 497 million euro, ordered to supply Windows XP without Media Player and reveal communications protocols to our competitors. Our full appeal against these measures is ongoing and will likely be decided by the end of the year.

In the meantime, we have nevertheless been ordered to comply with the 2004 decision and provide Windows XPN, which we have done. That version of the operating system was released to the market in June 2005. The second request (to offer protocols documentation to competitors) has been slightly more problematic. Compliance with this request requires clear articulation of the specific technical requirements by the EU, which has, until very recently, been reluctant to make their demands clear. While we have worked tirelessly with the European Commission on developing technical documentation for the communications protocols, the EU has frequently claimed our documentation is insufficient and that therefore we are not complying with the 2004 ruling. They may use this to justify fining us for being in non-compliance with the ruling.

One of the EU governments has leaked news that a decision on whether or not Microsoft has complied will come in July this year – and is indeed likely to include a fine. This non-compliance fine could total 100's of millions of Euro for the period Microsoft is judged not to have complied and it will come in addition to the original fine back in March 2004.

Nevertheless, we have continued to stress that we are working intensively with the Commission and the relevant bodies and mechanisms to create documentation to an agreed specification. This is a long and complicated process but it is nevertheless working well and producing results. We have therefore emphasized that we believe fines to be "unjustified and unnecessary". There is also a process by which – if we are fined for non-compliance – we can appeal this fine. However, this story will persist and is likely to raise its head again over the next few weeks as more details emerge in advance of the decision.

I can assure you that we are continuing to work day and night with over 300 dedicated engineers to create documentation which is complete and accurate to satisfy the European Commission. We have moved every available employee with knowledge of this technology to work on this project, and a great many of them have sacrificed greatly in terms of their personal lives over the last several months. Thanks to their admirable efforts, the process of that work is progressing well. We have delivered 5 of the seven agreed milestones and will deliver the last two on time. The next batch of documentation goes to the EC tomorrow, June 30, and the final batch will be delivered on July 18. This has been a huge challenge for our engineers but they have risen to it, working throughout nights and weekends to meet these very aggressive deadlines and create the highest quality documentation possible.

We hope very much that this great effort will be successful and will bring us to the end of the impasse with the EU Commission. In the mean time, we at Microsoft can say, without hesitation, that we have done everything that the Commission has asked of us and more and in our view any fines would be without justification and would impede the process.

We will keep you posted of any further developments.