The commission said Thursday that it was not satisfied with Microsofts proposed licensing program for dozens of communications protocols. Microsoft said it was informed of the commissions response at the same time as the public, and was still reviewing the information, but remains committed to working with the commission.
The decision is a sign that the commission is listening to the concerns of Microsofts competitors, including open-source groups, said Volker Lendecke, a Samba consultant and member of the core Samba developer team.
"They definitely understand whats going on. But the big question is, do they have the ability to really enforce a free licensing scheme?"
The commission found Microsoft had acted anti-competitively by leveraging its desktop monopoly to gain server dominance, and the licensing of communications protocols is meant to redress the balance.
But Microsofts licensing plan was criticized by open-source groups, who said the RAND (reasonable and nondiscriminatory) terms blocked the use of the GPL (GNU General Public License), central to open-source projects such as Linux and Samba.
For the protocols to be implemented in open-source projects, they must be royalty-free and cannot use a per-seat license, and so far Microsofts terms have come nowhere near such terms, Lendecke said.
"If you use the protocol, you have to tell Microsoft how many workstations will be using it, and pay a certain amount per workstation. We are free software; we have no control over who uses the software," he said. "Even if the fee were a tenth of a cent per seat, we still couldnt use that licensing scheme."
From the point of view of open-source companies, the effectiveness of the remedies depends on the use of a GPL-compatible license, open-source developers said. In its latest court hearings in Luxembourg, Microsoft argued that such a scheme would amount to forcing the company to give away its intellectual property, which would contravene international agreements such as the World Trade Organizations TRIPS.
Microsoft touched on the issue again on Thursday in a response to the commissions decision. "As the commission itself has noted, in large part each of [the issues] revolves around striking the appropriate balance between the need to preserve the legitimate private interests of Microsoft with the public interests of [the] commission with respect to implementation of the decision," Microsoft said in a statement.
There is no such conflict, says the Free Software Foundation Europe. "There is nothing in TRIPS that prevents a public-policy intervention to restore competition in the market," said Carlo Piana, an attorney representing FSF Europe in the cases ongoing hearings in Luxembourgs CFI (Court of First Instance). "There is no contradiction between protection of copyright and patents and antitrust regulation."
James Governor, principal analyst at IT analysis firm RedMonk, said there is likely to be more conflict over the licensing terms before the matter is resolved. This is partly because of the ambiguities inherent in "reasonable and nondiscriminatory licensing" and partly because of Microsofts approach to the matter, he said.
"One of the problems with RAND is, whos judging whats reasonable? What makes something reasonable? Its not rigorous enough to have something everyone can agree on," he said.
Microsoft also appears to have a bad attitude toward the process, which cant make things easier, Governor said. "Theyre already dragging their heels. If you want to talk about good faith, the indications for me are that Microsoft has not shown that," he said. This may just be a matter of appearances, but the commission will react to those appearances, Governor said. "Some of it may just be a question of tone. If thats the case, then [Microsoft] should have worked on that."
Such reluctance is no surprise to FSF Europe. "The line Microsoft has always drawn was of a merely formal compliance," Piana said. "We are not very confident that after the commissions statement, anything will really change. We would be surprised, because Microsoft has clearly stated that these were the best conditions they would willingly offer."
Microsoft spokesman Tom Brookes said Microsoft plans to respond "promptly" to the commissions concerns, which the company received only on Thursday evening. The commission has spent the past few weeks market-testing Microsofts proposals, and the results of the market testing will help the company create a better plan, Brookes said.
The commission is still evaluating Microsofts proposals on the naming for its stripped-down version of Windows, another part of the antitrust remedy.
The commissions remedies still have an opportunity to make a real difference, open-source competitors say. While Microsoft effectively took RealNetworks and Netscape out of the game before antitrust measures could make a difference, that isnt yet the case with workgroup servers, Lendecke said.
"If Microsoft were forced to open these protocols, it has the possibility of restoring competition in the server market," Lendecke said. "A competitor would be able to write an open-source implementation of Active Directory, which currently is not possible."
A battle is to be expected when the prize is such a key market, analyst Governor said. "The workgroup server market is the most important market in IT for vendors to make money," he said. "Its the key battleground of Microsoft against anybody else. This is Microsofts bread and butter."