EC Accused of ‘Poaching’

The European Commission antitrust ruling against Microsoft was “the largest encroachment of intellectual property in European” competition history.

So said the software giant midway through its attempt to annul it.

After spending the first two days testifying about bundling,
attention turned today to how well Microsoft abided by another EC
mandate: providing companies technical information needed for third-party applications to work well with Windows.

Microsoft lawyer Ian Forrester told judges of the EU’s Court of
First Instance that a requirement to share technical information with
rivals would change how the market works by “handicapping the leading
player in perpetuity.”

While the EC contends
Microsoft is guilty of foot-dragging, the software company sees the
issue central to its appeal.

Microsoft told the 13-judge court the EC’s case is not based on
consumers being harmed but competitors “who seek a better outcome in
Brussels than they obtained in their domestic courts,” Forrester
said.

Forrester said any regulation “should honor technical creativity
and persistence no less than legal creativity and persistence.”

According to Joe Wilcox, an analyst with JupiterResearch, interoperability is the crux of this case. A ruling on the issue in Microsoft’s favor is crucial because the EC wants to
expand its licensing requirement to open-source developers.
Microsoft could also reverse the licensing agreements already in
place, Wilcox told internetnews.com.

The EC requirement will tell developers “‘You take the risk, but
be prepared to subsidize your competitors if you are successful,'”
according to a statement from Hugo Lueders, the European director of
Public Policy for CompTIA, a trade group supporting Microsoft’s position.

Lueders also warned that if the European court lets the EC decision
stand, it could hurt investment in the EU economy.

“Who is going to
want to invest in the EU when regulators can arbitrarily poach away
one’s success,” asked Lueders. “The answer is — no one.”

One
persistent group of rivals disagrees.

Led by RealNetworks, Oracle and Sun, the
European Committee for Interoperable Systems (ECIS) supports the EC’s
position that Microsoft’s domination of the server OS market demands the
software maker license that information.

“Novell, not Microsoft, created this technology,” ECIS said in a
statement. The group points to Microsoft dominating the server
software market following refusing to provide Sun with technical
information in 1998.

Two years later, the group charged, Microsoft
went from around 40 percent of the market to more than 60 percent.

“When it is no longer in Microsoft’s business interest, it ceases
to supply this information, interoperability is compromised, and
market choice is restricted,” ECIS lawyer Thomas Vinje said in a
statement.

“Interoperability” defined by consumers and computer scientists
already exists, countered Forrester. The Microsoft lawyer charged the
word has become a slogan with which no one can disagree.

“Without very clear standards, no compulsory license can possibly
be lawful,” argued Forrester. The requirement falls below EU legal
standards, Microsoft said.

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