Microsoft has responded to some of the concerns about its proposed server interoperability licence, but has not yet worked out how to stop disadvantaging open source vendors.
Last month the European Commission (EC) rejected Microsoft's proposed server interoperability licence, saying it contained a number of serious flaws including unjustifiably high royalty fees and the exclusion of open source vendors.
Microsoft proposed this licence after last year's antitrust ruling, when it agreed to create a licence that would allow rival makers of server software to write applications that can interoperate with Windows operating systems.
A Microsoft spokesman said on Tuesday that it sent the EC a letter last week, which proposed a possible solution to three of the four areas of concern outlined by the Commission last month.
The only area where Microsoft has not offered any concessions is in the area of open source software. The EC is concerned that open source vendors are excluded from the licence agreement, as companies are not permitted to release the source code of products created using the licence.
The Microsoft spokesman said the software giant needs to discuss this concern with the EC, claiming it is difficult to resolve without impacting the "confidentiality of Microsoft's intellectual property". The spokesman said that Microsoft cannot allow open source vendors to release the source code of a product that has used the licensed protocols, as this would allow others to see how the protocols worked.
Instead, it hopes to reach an agreement with the EC that includes open source vendors, but stops them from releasing the source code.
"There are a huge number of examples of combinations of open source and proprietary software," said the spokesman. "We believe there are lots of models under which we can work with open source."
Free software organisations are also excluded from the Microsoft licence as it requires royalty fees for every copy distributed. The spokesman said he was not aware of any plans for Microsoft to reduce the royalty fees for free software organisations, or to exempt them from it.
Another EC concern is that Microsoft's proposed royalty fees were too high. The licence asked for royalties of up to $1,900 per server product sold or distributed.
The Microsoft spokesman said it has proposed lower and more flexible royalties to the EC. "The basic principle of per-copy charge applies, but the royalties are lower and there is more flexibility in the system," said the spokesman. The spokesman was unable to provide more details on the new royalty scheme.
Microsoft has also made it easier for companies to evaluate the protocol information before deciding to sign the licence agreement, in response to the EC's concern that it is difficult for companies to assess whether it's worth taking out a licence.
The software giant has increased the evaluation period from two to eight days, and has cut the evaluation cost from a daily fee of $5,000 (£2,671) per user, to $500 dollars per user, according to the spokesman. Any payment made is used towards the cost of the licence, if the user decides to sign up.
In response to the EC's concern that the licence agreement is also not flexible enough, Microsoft has told the Commission that it is willing to develop customised licences for those who want them, said the Microsoft spokesman.
An EC spokesman confirmed that it has received Microsoft's response to its concerns and is currently reviewing the letter. "The Commission is still analysing the Microsoft letter and has not reached any conclusions yet," said the spokesman. "For the moment, the Commission has not agreed to anything that Microsoft has proposed."