Microsoft in new move to appease EU over antitrust

25 Jan 2006

UPDATE: Microsoft has taken the step of licensing parts of its Windows source code to other software developers in a bid to comply with EU requirements.

The company’s general counsel Brad Smith announced today the software giant is making the voluntary move in order to address issues raised by the European Commission’s Statement of Objections in December. That statement asserted previous documentation supplied by Microsoft was not sufficient to allow licensees to implement certain parts of Windows Server communications protocols.

The commission’s original decision of March 2004 decreed that Microsoft had violated EU antitrust laws by exploiting its dominant position to compete unfairly against other companies.

Microsoft claimed today’s move goes beyond the legal obligations of the 2004 decision, which asked it to provide other software developers with the technical specifications of its proprietary communications protocols. The company said a reference license to the Windows Server source code would provide developers with “the most precise and authoritative description possible of the Windows protocol technologies”.

Software developers will now be entitled to view the Windows source code which will help them to better understand how to develop products that interoperate with Windows. However, they will not be allowed to copy Microsoft’s source code.

“Today we are putting our most valuable intellectual property on the table so we can put technical compliance issues to rest and move forward with a serious discussion about the substance of this case,” said Smith. “The Windows source code is the ultimate documentation of Windows Server technologies. With this step our goal is to resolve all questions about the sufficiency of our technical documentation.”

Smith added he did not rule out other steps to help the company to comply with the decision.

The IT analyst firm Ovum called Microsoft’s decision to give licensees access to the Windows source code “superficially appealing”, noting that the source code for software represents the most accurate and reliable documentation.

However, David Mitchell, software practice leader Gary Barnett, principal analyst at Ovum argued that this development would not put the Commission’s concerns to rest. “Source code is of little practical benefit to those trying to develop inter-operable code – there is simply too much of it, and it’s too hard to understand,” they said in a briefing note.

They pointed out that the European Commission wants Microsoft to address its concerns about the documentation that the company agreed to provide as part of the settlement. The commission expressly stated that it doesn’t require source code, only that Microsoft complies properly with its original request.

“Microsoft should get back to the table with the EU to establish what is wrong with the documentation it has provided, and make strenuous efforts to remedy the deficiencies,” the analysts said. “This would represent a far more suitable and sincere attempt to bring this saga to a close, rather than adding another dimension to an argument that is already confused.”

Microsoft has said it will continue to prepare a response to the comission’s December Statement of Objections. The response is due on 15 February. Earlier in the day, the EU’s Court of First Instance announced that a hearing on Microsoft’s appeal against the Commission decision would be held April 24 to 28.

By Gordon Smith