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Microsoft: We're 'in Full Compliance' With EU

Microsoft  has until April 23 to respond to the European Competition Commission accusations that it is abusing its monopoly power. But instead of waiting till then, the company decided to publicize in advance the main points of its side of the story.

Responding to accusations by the commission that it is abusing its monopoly position by charging exorbitant fees for interoperability licenses, Microsoft spokesman Tom Brookes told internetnews.com that "the terms on which we have made the protocols available are reasonable and nondiscriminatory."

While the contents of the commission's March 1, 2007, Statement of Objections (SO) still remain confidential, Microsoft is publicizing its talking points ahead of the April 23 deadline for a response. Microsoft is making the argument that its technology is indeed innovative; the company is also asking for fair compensation for the use of that innovation.

Microsoft believes its "technology is innovative because it includes 36 patents issued by U.S. and European patent offices, with another 37 patents pending," Microsoft spokesman Jack Evans told internetnews.com.

These statements are direct rebuttals to claims made by the commission in a statement issued on March 1 summarizing the contents of the SO. In that statement, the EU's Commission accused Microsoft of violating the terms of its March 2004 decision, which obligates the Redmond, Wash.-based software vendor to make its licensing protocols available to rivals on reasonable terms.

The commission said its "preliminary view is that there is virtually no innovation in the 51 protocols ... where Microsoft has claimed non-patented innovation."

The commission also said in the statement that, of the total 160 instances where Microsoft has claimed innovation, "only four represent even a limited degree of innovation."

If Microsoft were to lose this fight, it faces fines of $4 million per day, retroactive to Dec. 16, 2005, which already amounts to more than $1.3 billion.

The war of words is sure to continue. Brookes said that the company will respond fully to the SO by the April 23 deadline set by the commission, but noted that "we believe we are in full compliance with the March 2004 decision."

The confrontation over interoperability has been brewing for over two years, and a little over one year since the EU laid down the law for Microsoft.

Microsoft recently trumpeted an agreement with Quest Software  as proof that its licensing arrangements are considered fair in the market. Evans also noted that its position is "supported by the analysis conducted by PriceWaterhouseCoopers that found that our pricing is at least 30 percent below that of comparable technology in the marketplace."

No one at the commission, which is closed for the holiday until next Tuesday, was available to comment.

This is not the only fight between Microsoft and the EU's Competition Commission. Microsoft is appealing a $613 million fine it already paid. A decision on that issue is expected sometime this year.



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