RealTime IT News

Microsoft Hard-Balling EU Over Vista

Microsoft is spreading the word that it might not ship Vista to Europe if regulators don't cooperate.

This after CEO Steve Ballmer issued that same threat to European Commissioner Neelie Kroes during a telephone conversation on Aug. 22.

Microsoft is now taking its brinksmanship to the next level by making the substance of that conversation public, through the use of emissaries.

"This is part of the negotiating strategy," a person familiar with the situation told internetnews.com. "They're in a public relations battle."

Microsoft made the same threat to South Korean regulators, but did not follow through when they lost that battle.

In this instance, Microsoft is complaining that Kroes has not been clear enough with Ballmer about what it will take for Microsoft to win commission approval for Vista, the new operating system.

Recent history between the European Commission and Microsoft suggests that the Redmond, Wash.-based software vendor will come out on the short end of any regulatory battle.

The EC fined Microsoft $357 million earlier this year for failing to live up to earlier anti-competitive decrees.

No wonder then that Microsoft is trying to put a deal in place with the commission before Vista ships, rather than waiting for it to rule on the new operating system's merits after the fact.

The Computing Technology Industry Association (CompTIA), a stalwart Microsoft ally in its ongoing battle with the commission, urged European regulators to clarify their position on Vista.

"We urge the EC to make their regulatory path clearer, more consistent and transparent," said Hugo Lueders, European director of public policy of CompTIA, in a statement.

"The present EC enforcement lacks clarity. Quite simply, it is a floating goalpost rife with ambiguity," he added.

He, too, noted that if the EU doesn't comply with this request, Microsoft may simply take its ball and play elsewhere.

"The sad result will be a European Union bereft of its innovative edge and zeal," he said.

The commission's position is that the EU's competition rules are crystal clear.

Jonathan Todd, the European Commission spokesman on competition, noted that the commission's principles regarding bundling of products and interoperability are clearly reflected in its March 2004 antitrust decision against Microsoft.

"The responsibility for ensuring that Vista complies fully with EU competition rules ... lies not with the commission but with Microsoft," he said in a statement.

In particular, said Todd, Microsoft should accept its responsibilities "as a near-monopolist" and refrain from abusing its dominant market position.

"It is not up to the commission to give Microsoft a definitive 'green light' before Vista is put on the market. It's up to Microsoft to accept and implement its responsibilities," he said.

In the end, however, the betting is that Microsoft won't make good on its threats here, either.

Microsoft reported that nearly a third of its revenues come from outside the United States, according to its most recent 10-K filing with the SEC.