European Commission vs. Microsoft: Who is being unreasonable?

European Commission vs. Microsoft: Who is being unreasonable?

Summary: Now we know another reason Microsoft rolled out with great fanfare last week its interoperability principles. Not only was it hoping for one more chance to claim openness around its Office Open XML document format, but it was also hoping to head off another hefty antitrust fine from the European Commission.

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TOPICS: Microsoft
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Now we know another reason Microsoft rolled out with great fanfare last week its interoperability principles. Not only was it hoping for one more chance to claim openness around its Office Open XML document format, but it was also hoping to head off another hefty antitrust fine from the European Commission.

On February 27, it became clear that Microsoft's effort on the EC front was in vain: The EC announced it planned to charge Microsoft $1.3 billion for failing to comply with terms from EC's 2004 antitrust case. The EC said the new fine (on top of the $1.2 billion it had already charged Microsoft) was for failing to provide competitors access to its protocols at a reasonable price, enabling them to build compatible solutions.

Microsoft officials are still maintaining that last week's interoperability announcements -- which included providing others free access to protocols and lower fees for licensing the patented ones -- had nothing to do with any actions or hints of actions on the part of the EC. The timing of last week's announcements was sheerly coincidental, Microsoft officials are still saying.

Here's what Microsoft told me late on February 22, via an e-mail interview. The answers are from an unnamed company spokesperson:

Q: Why did Microsoft make this announcement on February 21? Is Microsoft saying that it was purely coincidental that it announced new interoperability measures a week before the OOXML ballot-resolution meeting Geneva? Or was there something happening on the European antitrust front that spurred these announcements?

A: The timing of this announcement is driven by the fact that we know that our customers, IT vendors and open source communities want to see this set of broad reaching changes to our technology and business practices implemented as soon as possible. The comprehensive set of activities apply across six high volume products, and will increase the openness of these products and drive greater interoperability, opportunity and choice for developers, partners, customers and competitors.

Q: Microsoft yesterday said that it will offer companies who want to license its patented IP/APIs/protocols a "very low rate." Is this new rate lower than what Microsoft was offering before? How much lower?

A: It is generally lower than before.

Q: Microsoft and Samba entered into a complex agreement in December to allow Samba's open source engineers access to Microsoft APIs and protocols needed to make their products interoperable. Samba paid 10,000 Euros (via a non-profit created by the Software Freedom Law Center) for this access. Will Microsoft be renegotiating its agreement with Samba and/or giving Samba any money back as a result of these new interoperability agreements?

A: PFIF (Protocol Freedom Information Foundation, the Software Freedom Law Center organization), along with the other MCPP (Microsoft Communication Protocol Program) and WSPP (Workgroup Server Protocol Program) licensees, will be contacted individually in the near future to discuss their specific situation in order to address their needs.

Whether or not you believe Microsoft is being forthright about why it trotted out a number of its top execs last week (Microsoft says it was simply coincidental timing; today's EC announcement says different), the question remains whether the EC is being "reasonable" in levying these new fines. The EC's contention is that Microsoft had more than four years to make these protocols available in a fair way to Microsoft's competitors -- and without its constant prodding that the Redmondians never would have. Microsoft officials have said it took the company all that time to clean up and publish the first set of protocols (MCPP and WSPP), at a cost of "millions" of dollars.

I've had some serious qualms about the EC antitrust case against Microsoft, primarily because I never felt that the EC proved customers were harmed by Microsoft's actions. It proved, instead, that Microsoft's competitors were harmed. But I have to say I do agree with the EC that Microsoft was trying to drag its feet as much as possible when it came to providing the promised protocols. Adding insult to injury, Microsoft acted like it made last week's announcements out of the goodness of its heart, instead of because of the hope it could stave off another big fine.

What's your take? Who is being more unreasonable here? The European Commissioner for Competition Neelie Kroes or Microsoft CEO Steve Ballmer & Co.?

Topic: Microsoft

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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468 comments
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  • Fine is for the past

    This fine is for the past and has nothing to do with their current 'openness'!
    tombalablomba
    • that makes too much sense for this forum

      I am surprised that anyone would think that Microsoft's latest statement was some sort of last minute attempt to appease the EU in hopes of reducing the fines. It is perhaps an attempt at spin-doctoring to the public and journalists. The fines were carefully determined by applying laws, they are not the result of jealous socialists wishing injury on a successful foreign company. Microsoft simply refused to pay a fine, and that resulted in a new, even larger fine.

      Does anyone honestly think that Microsoft should be free to ignore EU antitrust regulations? It may be argued that the EU antitrust rules are not fair or efficient, but they are still the law and they must be followed. The solution to bad laws is to lobby to have them changed.
      shis-ka-bob
      • To reinvigorate the world economy

        Microsoft should be smashed to pieces.

        That's slowly happening anyway by the non-Microsoft world.

        The sooner they crash the better. And if people think that they "lots of money" that's their own problem, because they are the same people who thought they should make money out of thin air just because they have money already.

        Let the world work together. Stuff Microsoft. Completely.
        fr0thy
        • The world needs Microsoft

          The world needs Microsoft as much as Microsoft needs the world.
          Tiggster
          • Um...

            The world doesn't need Microsoft for jack shit. That's only
            what they want people to think; that computing is impossible
            unless Microsoft is somehow involved. And it's all total
            bullshit.
            DarkPhoenixFF4
          • ok...

            Windows stops being supported: 90+% of all software just died. We are set back ridiculously. Back to the 80's, I guess?
            evilkillerwhale@...
          • Doh!

            It means that real people with real knowledge get busy !!!

            All the M$ t-shirt wearing know nothing dimwits go and sell burgers, as that's about their intellectual limit.
            fr0thy
          • That's the point!

            <i>"Windows stops being supported: 90+% of all software just died."</i>

            What IF Microsoft died? (And that could be anything from bankruptcy to a "terrorist attack" to a natural disaster.) Without the use of truly OPEN protocols and file formats, "90%" of the world's data becomes useless.
            NoCalDrummer
          • I love this country!

            Because we have the right to our own opinions and can discuss different views.

            While I agree with you in principal I have to disagree in practise! Have you considered all of the havoc that would be created if there was even less than the useless support for MSwhatever x.x? All the people whose jobs would be lost? The strain on the economy while nature attempted to fill the vaccum left by the escape of bad gass? Sure there is an alternative or two but consider the cost to businesses involved in replacement!

            No I have to agree with the previous poster that at this point we all need MS as much as they need us!

            But let us take a moment and asses blame where it belongs.... do I need to mention all of our names?
            howardweatherly
          • and by the way sometimes I can't spell either!

            My bad!
            howardweatherly
          • IP is stunting change...

            Make all software open and free. Medicine and economics would improve substantially.
            Information_z
          • No important jobs lost

            if Microsoft just disappeared. The existing operating systems and software would still exist and would still need to be supported by the existing service companies. We would though, have a situation where programmers could follow real standards, which must be FREE to use if they are standards.

            The threat of job losses is a phony threat.
            Update victim
          • Monopolies

            Reminds me of the old days when the saying was, "Nobody was ever fired for buying IBM>"

            Back then the world needed IBM as much as IBM needed the world.
            fulletk
          • Yup -- just like....

            The world needed DEC and VMS not too long ago.

            We don't need MS. What we need is openness and compatability between software. MS wants to lock you into a single source solution. MS software.

            That's why there are standards bodies that work with the industry to create those standards. It's also why MS has trotted out their "standard" hooey call "Open" XML.

            Russellphoto
            russellphoto_z
          • The world does not need M$

            M$ needs the world. The world does not need M$.
            Professor8
          • but...

            MS could stop producing today, and cut every member a nice fat paycheck, sell their company buildings and stock and everything and everyone there would be better off. They don't need us.

            My pc though: without MS, all my windows software will cease to work on new systems. I will have to maintain an OLD system to run it. I want a new system that runs my DOS games, thanks. My mac does not run Dos games. Or windows games. or anything that's a .exe for that matter. The largest used program extension in existance is not supported on anything but Windows. Hmmm... I guess we don't need Windows to run what only windows can run... I can just throw my software fast enough that the disk reads itself, a black hole opens up, and your brain is sucked back from the abyss making you have actual thought once again.

            Good Day.
            evilkillerwhale@...
          • you've answered the question....

            Hmmm. I think you've just [inadvertently?] supported the reason Microsoft should go (in it's present form...). It has produced a monopolistic approach where nobody can run their software due to their shortsighted approach to interoperability. Fix this and the problem will go away. Of course, so will their profits if they continue to produce their braindead software that remains bloated, semi-functional and useable for only the most trivial of reasons. The world doesn't need more commercial lockout; it needs open standards where everyone can compete in a true market situation.... Open up Microsoft, start to compete properly - don't continue to hide behind your monopoloy. It is embarrassing for you as any objective comparison with 'rugged' software will indicate.
            niftynev
          • re: you've answered your own question

            Do you think Apple should open up as well? Do you feel you should be able to run OSX on x86/64 machine? Why or why not? <br><br>
            What about companies that make hard goods, that use patents and have trade secrets, should they be forced to release patents and any company build the same product from the same specs they spent perhaps millions developing? <br>
            Why or why not? <br><br>
            Finally, explain to me how Microsoft is in ANY way keeping Venture captialists, or the IBMs and Googles of the world, from building a very large scale OEM exclusively for Linux? And if MS is not stopping it, why is not happening? <br>Seems to me Apple is doing just fine, why not Linux? Where's IBM when you really need them?
            <br><br>
            Also, at what point did you forgive IBM for it's many anti trust ways and being part of what brought ms to power? Do you know history and the kind of pushing around IBM did? Why are you not an avid anti IBM activist as well? <br>
            Is it because they've thrown open source a bone? Showing that open source needed huge companies that have been in anti trust court many times to embrace it for any success to occur. Much like the Google and Yahoo linkage to Firefox, giving them huge amounts of resources they'd not have using only the non corporate open source communities. It can be argued that only deals with proprietary software companies brough FF out of it's 1.0 class of browser.
            xuniL_z
          • The world also does not need O$ X now Linux Di$tro$. .......

            O$ X and Linux DI$TRO$ need the world. <br>
            The world does not need O$ X or any Linux DI$TRO$. <br><br>
            For that matter, the world does not need cars or trucks or radios or iPhones or cellular service or oil companies or you or me.....they all need the world as well. What is your point?
            Or was that your daily anti ms declaration?
            xuniL_z
          • if they didn't exist

            Someone once said something along the lines of:

            "If Satan didn't exist, someone would find it necessary to invent him".

            Same goes with M$. There's always going to be an Evil One, whether M$ and Bill Gates exists or not. There has to be someone to hate.

            So, you are right, M$ is necessary.
            chinese.bookie