EC to Microsoft: Assume The Position

Microsoft executives may have been hoping that the company’s troubles with the European Commission (EC) were finally over after it cried “uncle” and dropped all further appeals in October over the EC’s 2004 antitrust ruling.

That would have been too easy.

Monday, the EC announced it has launched two new probes into the company’s business practices. However, whether the EC will yet again drop the hammer on Microsoft again is open to debate.

“It is clear that the EC is flexing its muscles,” Tim Bajarin, president of tech consultancy Creative Strategies, told But the EC’s next move isn’t at all clear.

“Microsoft sounds like they’re trying to comply [with previous EC rulings] but it’s very hard to discern the veracity of the arguments on both sides,” Roger Kay, president of analysis firm Endpoint Technologies, told

For its part, the EC, in a statement, said it has not drawn any conclusions as to whether Microsoft is in further violation of European Union (EU) antitrust laws or not. However, despite Microsoft’s recent concerted efforts to lighten its legal burdens by settling lawsuits, dropping appeals, and pledging to comply with court rulings against it, the litany of offenses seems to continue to mount.

In September, the EU’s Court of First Instance (CFI) completely upheld the EC’s 2004 decision that Microsoft had violated EU antitrust laws and abused its market dominance to unfairly disadvantage competitors — in the areas of media player technologies and communications protocols for workgroup servers.

Following that court defeat, Microsoft dropped further appeals in late October.

Then, last month, Norwegian browser maker Opera Software lodged a complaint with the EC over Microsoft’s continuing practice of bundling its Internet Explorer (IE) browser with Windows, including Vista, in order to block competing browsers. As a precedent, Opera cited the EC’s ruling against Microsoft’s bundling of Windows Media Player (WMP) with Windows. Opera also claimed that Microsoft purposely keeps IE from adhering to open Web standards in order to disadvantage other browser makers who do comply with standards.

The second complaint that the EC has decided to examine was filed by the European Committee for Interoperable Systems (ECIS).

“In the complaint by ECIS, Microsoft is alleged to have illegally refused to disclose interoperability information across a broad range of products, including information related to its Office suite, a number of its server products, and also in relation to the so called .NET Framework,” the EC’s press release announcing the new probes states.

Included on the list are Microsoft’s Office Open XML (OOXML) formats – the default file formats for its Office productivity applications. Microsoft lost its initial bid to establish OOXML as a co-standard to the Open Document Format (ODF) on a fast track basis for consideration by the International Organization for Standards (ISO), in
early September

According to the ECIS’s Web site, the organization counts a veritable master list of Microsoft’s leading software competitors among its membership — Adobe Systems, Corel, IBM, Linspire, Nokia, Opera, Oracle, RealNetworks, Red Hat, and Sun Microsystems are among its members.

Several analysts wondered aloud about why OOXML should be included on the list of suspect technologies, partly because to date Microsoft has been ineffectual at achieving standards status for the formats. Even if Microsoft is able to achieve ISO standards status, however, that might not be a bad thing, says one.

“We don’t think it’s a foregone conclusion that there should be only one [document] standard [so] I don’t really think there’s a smoking gun in this context,” Peter O’Kelly, research director at analysis firm The Burton Group, told

That doesn’t stop Microsoft’s critics from cheering the probe, however.

“This would seem to indicate that Microsoft’s strategy of offering OOXML to … ISO may fail to achieve its objective, whether or not OOXML is finally approved as a global standard,” Andrew Updegrove, attorney and open source advocate, said in a statement e-mailed to .

The EC said it will also examine other Microsoft technologies for any anti-competitive taint.

“Allegations of tying of other separate software products by Microsoft, including desktop search and Windows Live have been brought to the Commission’s attention. The Commission’s investigation will therefore focus on allegations that a range of products have been unlawfully tied to sales of Microsoft’s dominant operating system,” the EC said in its release.

Opera’s complaint asks that the EC either force Microsoft to remove IE from Windows or to include competing browsers along with IE, with no default pre-chosen. (The ECIS, of which Opera Software is a member, supported Opera’s complaint last month.)

Creative Strategies’ Bajarin questioned the strength of Opera’s complaint. “It’s kind of old news since the IE issue has been settled in the U.S.

For its part, Microsoft’s initial statements seem to be solicitous of the EC’s point of view, rather than defiant, as it had been in the past.

“We will cooperate fully with the Commission’s investigation and provide any and all information necessary. We are committed to ensuring that Microsoft is in full compliance with European law and our obligations as established by the European Court of First Instance in its September 2007 ruling,” a Microsoft spokesperson said in an e-mailed statement.

How this latest round of investigations will turn out, however, is anybody’s guess at this point.

“From a purely political perspective, it’s impossible to predict what the EC will do,” Dwight Davis, vice president at researcher Ovum Summit, told “I can imagine a scenario where the EC won that victory [in September] but doesn’t feel like pushing its luck, but it may be that they’ve been emboldened by that victory, too,” he added.

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