RealTime IT News

Microsoft to EC: Can't We Just Talk?

Microsoft  doesn't want a hearing; it wants a conversation.

The company today filed its official response to the European Commission's Competition Committee's Statement of Objection (SO), issued in March, which accused Microsoft of charging monopoly prices for interoperability protocols for its Windows Workgroup servers.

But the software vendor, which had until the end of the month to respond, said it wants the commission to tell it what its prices "must be in order to qualify as 'reasonable.'"

"We need greater clarity on what prices the commission wants us to charge, and we believe that is more likely to come from a constructive conversation than from a formal hearing," said Microsoft attorney Brad Smith in a statement.

Smith also confirmed that the company did not request an oral hearing relating to the SO.

Microsoft spokesperson Anne-Sophie de Brancion added that Microsoft believes a more cordial discussion will achieve the commission's aims more quickly than a protracted legal battle.

Now, she told internetnews.com, "the ball is in the commission's court."

The commission confirmed receipt of Microsoft's response, and said it will now "decide whether to impose a daily penalty on Microsoft for failure to comply with the March 2004 decision."

Microsoft faces fines of up to $4 million per day, retroactive to December 16, 2005.

But the commission doesn't like repeating itself.

The current stalemate resembles Microsoft's stance over the introduction of Vista into the European Union. Microsoft spent months asking the commission for greater clarity over what it could legally include in the new operating system, and the commission systematically responded by saying that Microsoft would find all the answers it needs in its March 2004 decision.

Both sides agree that Microsoft will license protocols to its Windows Servers on "reasonable and non-discriminatory terms." Microsoft has argued that it is entitled to royalties on those protocols because they have inherent value.

The commission's position, however, is that Microsoft's protocols for the most part do not constitute meaningful innovation and should therefore be offered free of charge or for nominal sums. Microsoft argued that it has been issued over 30 patents for those protocols, proving that it must have innovated somewhere.

Microsoft's approach this time around is far less bellicose than last year, when it took the unusual step of posting its official response to an earlier SO on this same issue.