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Sanctions Against Microsoft

Date: Mar 18, 2005
Contributor: Loraine Sakamoto

EU Commission: Microsoft Offer Inadequate

Microsoft Corp.'s latest offer to comply with sanctions imposed by the European Commission is insufficient to meet the concerns of customers and consumers, a Commission spokesman said on Friday.

"On the basis of market test results, we have serious doubts that Microsoft is complying with the interoperability remedy," EU competition spokesman Jonathan Todd said.

Microsoft said it had given proposals to the Commission starting as long ago as May that deal with the "nuanced and complex" issues and that it was fully committed to complying with the decision.

The Commission's concern focuses on one of the of two remedies that it imposed on the U.S. software giant a year ago, along with a record 497 million euro ($667.6 million) fine.

The Commission found the company abused its dominant market position to compete unfairly against rivals, including in the market for servers used in offices to operate printers and file access -- the so-called interoperability issue.

It ordered Microsoft to share data protocols with competitors, including open source software companies.

After losing a court attempt to suspend the sanctions, Microsoft is required to comply while it appeals the Commission's decision at European Union courts in Luxembourg.

The Commission says it has been waiting for Microsoft for months to comply with the sanctions in a way that customers believe will work.

MICROSOFT PROPOSALS FAIL

But after checking with customers and competitors about the company's latest proposal, the Commission found it failed on four counts.

"It is very difficult for potential beneficiaries to have access to the documentation to evaluate whether it is worthwhile to take out a license," the Commission's Todd said.

Also those who want to license Microsoft's protocols must take an all-in-one license and pay for items they do not want, along with those they wish to buy, he said.

The Microsoft proposals exclude open source vendors, he said.

The key open source vendor is Samba, one of the biggest rival distributors of workgroup server software, which runs on the Linux (news - web sites) operating system.

Samba said Microsoft wanted it to pay royalties for each individual user, but that it distributes its products free and does not keep track of individual users.

Finally, beyond all the other problems, Todd said, "It would appear that the level of royalties applied would be unjustified."

The company said it welcomed the results.

"Microsoft remains fully committed to complying with the Commission's decision," the company said in a statement.

The company said it was grateful for the results of the market testing, "as it enables us to respond promptly in an appropriate way to work through the issues raised with the Commission."




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