EU: Microsoft Response to Antitrust Order Falls Short

The European Commission lets Microsoft know loud and clear that it still has not complied with its 2004 antitrust order.

The European Commission, the executive body of the European Union, on March 10 sent Microsoft a hard-hitting letter, telling the software maker that it was still out of compliance with its antitrust order.

The Commission did not mince its words, saying in a statement released in Brussels that Microsoft had added nothing substantial to the revised Technical Documentation compared to the previous version.

"The material continues to be incomplete, inaccurate and unusable. The improvements required to the documentation are not merely refinements or improvements to the text: the documentation as it stands is unusable," the letter said.

The letter is the latest in a series of back-and-forth claims and counter claims between Microsoft and the Commission, which started last December when the Commission issued a "statement of objections," claiming that Microsoft had not complied with its 2004 order, which essentially requires the software giant to provide accurate and adequate protocol information to allow rivals technology to interoperate with Windows PCs and servers.

At that time the Commission warned Microsoft that it could face a retroactive fine of up to $2.37 million a day for failing to comply with its antitrust order.

But Microsoft fired right back, saying that it planned to contest the Commissions statement of objections "to the full extent permitted under EU law, including a full oral hearing."

/zimages/2/28571.gifClick here to read why some industry leaders questioned Microsofts source code move.

It also vigorously defended itself and its actions, saying the Commissions Statement of Objections was unjustified and referred to technical documentation it had already submitted, saying neither the Commission nor the Trustee had read or reviewed these new documents.

Then, in January, Microsoft said it had decided to voluntarily license all the Windows Server source code that applied to the antitrust requirements set out in the EC judgment against it.

"With todays announcement, Microsoft has supplemented the existing resources with a new license for all of the Windows Server source code that implements all of the communications protocols covered by the 2004 Decision," Brad Smith, Microsoft Senior Vice President and General Counsel, said at that time.

But that move received a lukewarm response at best from the EC, competitors and trade groups, who said they needed to see the details on the license terms and the code covered by it before they could assess whether it would help.

Microsoft also provided the Monitoring Trustee (Professor Neil Barrett, a computer science expert appointed by the Commission on the basis of a shortlist of candidates submitted by Microsoft) with revised interoperability documentation on December 29, 2005 following the Statement of Objections, and Barrett met with Microsofts engineers in late January 2006.

But the EC said that the latest report from Barrett indicated that Microsoft had not yet complied with the obligation to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers.

The Commission has also sent Microsoft a report from TAEUS Europe Ltd, the European subsidiary of TAEUS International Corp., a Colorado-based firm that specializes in intellectual property valuation, reverse engineering, litigation support and expert testimony, and which was recruited by the Commission as expert advisors in December 2005.

TAEUS analyzed the reports from the Trustee cited in the December 21 Statement of Objections and also looked at Microsofts documentation.

"TAEUS concludes that Microsofts documentation was written primarily to maximize volume [page count] while minimizing useful information," the EC said in its statement.

"Having analyzed the latest reports from the Trustee and TAEUS, the Commission takes the preliminary view that this information continues to be incomplete and inaccurate," the EC said.

The Commission added that both reports pointed out that Microsoft appeared to assume that it was for users of the documentation to report incorrect, incomplete or inaccurate information which Microsoft would then correct.

/zimages/2/28571.gifClick here to read more about the Commissions appointment of a British cyber-crime expert to assist in overseeing Microsofts compliance.

For his part, Trustee Barrett said that Microsofts response that "such bugs in the documentation are unavoidable" was understandable, "but to expect that all such subsequent problems will be encountered and reported by users ... is not sufficient. It is Microsofts responsibility to present suitable documentation."

The TAEUS report compared this to a car manufacturer responding to a customer complaint that a car had been delivered without wheels.

"This would be like the manufacturer supplying wheels only to have the next deficiency come up—namely that the automobile has no engine, and then no steering wheel, then no brakes, etc," the report said.

Microsoft has requested an oral hearing, which is scheduled for March 30 and 31, 2006. The Commission will then, after consulting the Advisory Committee of Member State Competition Authorities, issue a decision on whether to impose the daily fine of up to $2.37 million a day on the company.

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