EUs Hands May Be Tied in Microsoft Case

Moving to force Microsoft to share its server protocols with open-source developers may provide the software giant with grounds for an IP-protection appeal.

European regulators may be powerless to give open-source competitors effective access to Microsofts server protocols, despite antitrust rulings against the company and the EUs ability to impose massive new fines.

The European Commission has said a proposal submitted by Microsoft Corp. this week on implementing EU antitrust sanctions is the companys last chance to avoid new fines, which could amount to 5 percent of Microsofts daily global sales.

The Commission ruled a year ago that Microsoft must offer a version of Windows without a bundled media player, and must allow competitors to license server communications protocols.

While the issues around unbundled Windows are understood to have been resolved, Microsofts plan for licensing the server protocols has been repeatedly found wanting, and negotiations have dragged on for months.

A core sticking point is the licenses per-seat fees, which make them useless for open-source projects, according to open-source developers.

But where it comes to these crucial licenses, the Commissions hands may be tied. "If the Commission requires Microsoft to make its protocol licensing GPL [General Public License]-compatible, it could jeopardize their entire case," said Jonathan Zuck, president of ACT (the Association for Competitive Technology), which supports Microsofts side of the case.

/zimages/5/28571.gifClick here to read more about Microsofts antitrust compliance controversy.

Earlier this year the European Unions CFI (Court of First Instance) ruled that Microsoft must implement the Commissions sanctions right away, without waiting for the outcome of a broader appeal of the case, which could take years. However, the Commission cant force Microsoft to give away its intellectual property.

"Any refusal by the Commission to allow adequate protection of Microsofts intellectual property could constitute a new fact that would allow Microsoft to submit a new request for suspension of its sanctions," said Zuck. "If the European Commission refuses to allow Microsoft to adequately protect its intellectual property, it will provide Microsoft with a strong case for suspending these sanctions until appeal."

The legal team on the other side agreed this is a possibility. "If Microsoft believes the measures imposed by the Commission are causing real damage and theres a need for urgency, they can appeal before a judge," said Carlo Piana, a partner with Tamos Piana & Partners, which represents the FSF (Free Software Foundation) Europe in the case.

/zimages/5/28571.gifRead more here about the FSF Europes involvement with the Microsoft antitrust issue.

Pernicious protocols

A central issue in the case so far has been whether Microsofts server protocols constitute intellectual property that the company should be allowed to keep secret.

While the CFI ruled that Microsoft must offer particular protocols to competitors under reasonable and non-discriminatory terms, as called for in the Commissions antitrust remedies, the matter of how important the protocols are and how much protection they deserve has not been fully resolved, according to those on both sides of the debate.

That means it is unclear how far the Commission can go without triggering an appeal that would, at the least, mean yet another delay.

Microsofts supporters argue that the protocols are of no use for true competition. "The only reason competitors would want internal protocols like these, the kind Active Directory uses to talk to itself, is to create a clone of existing technology," said Zuck. "These white box drop-in replacements for Windows servers do not represent real innovation or competition on the merits."

Next Page: What open-source developers need from Microsoft.