Microsoft Accused of Hijacking Interoperability

The European Court of First Instance heard from experts today whose
testimony excoriated Microsoft for holding the workgroup server market
ransom by refusing to allow competing systems to communicate effectively
with Windows servers.

They also told the court that Microsoft is using its growing strength in the
workgroup operating systems market to muscle out the competition.

The case is an appeal by the Redmond, Wash.-based company of an earlier
European Commission antitrust ruling that it characterized yesterday as “the largest encroachment of intellectual property in European” competition
history.

Microsoft argued that it should not be punished for having pioneered
interoperability protocols — the standards allowing different kinds of
servers from communicating effectively — by being forced to turn over the
fruits of its labors to its competitors.

Today, witnesses for the European Committee for Interoperable Standards
(ECIS), which counts Oracle, Sun Microsystems, and other Microsoft rivals
among its members, had their turn at the bar.

Antitrust expert William Bishop argued that with 70 percent of the workgroup server market, Microsoft’s position is so dominant that competition
has been relegated to “a shrinking fringe.”

However, Townsend Feehan, a Brussels-based lawyer for Microsoft, told
internetnews.com that while the 70 percent could be accurate,
it was essentially meaningless.

“The market has been arbitrarily defined [by the European Commission], and
as defined, Microsoft may have 70 percent of that market. But it’s been defined in
a manner that nobody else recognizes,” said Feehan.

But the crux of the case may well rest on whether or not the judges accept
Microsoft’s argument that it was an innovator in the field of
interoperability, or whether they agree that it has unfairly withheld those
crucial protocols.

Ronald Alepin, an independent consultant and former CTO
for Fujitsu, disputed the idea that Microsoft had been an
innovator in the field.

He said that interoperability protocols were
developed by companies other than Microsoft, and that Microsoft has simply
extended the protocols and then refused to disclose the extensions.

In so doing, he told the court, Microsoft “has hijacked standard
interoperability protocols agreed by the entire industry.”

“Microsoft can and is putting limits on what kind of interoperability third-party workgroup servers can offer by refusing to disclose interface
information.”

A person close to Microsoft disputed that contention.

“I don’t think that’s a fair statement,” the source said. “Microsoft does a great deal and works with others in bodies that deal with
interoperability.”

However, according to another witness today, Andrew Tridgell of the Free
Software Foundation Europe, Microsoft has not participated in
interoperability conferences in five years.

Alepin also testified that IT customers running Windows elsewhere will be
reluctant to implement workgroup servers made by other vendors if they know
that those servers won’t work effectively with the ones running Windows.

“IT customers won’t consider a third-party server if it means a reduction in
overall functionality of the workgroup or a reduction when compared to a
Windows server,” he said.

Joe Wilcox, an analyst with JupiterResearch, supported that view. He told
internetnews.com that interoperability is “the top priority among IT
managers in most categories that we look at.”

Wilcox noted that, having conquered the desktop market, the server market is
the biggest growth opportunity for Microsoft. He said that Microsoft’s
strategy has been to increase the integration between back-end server
software and front-end desktop software in order to extend its reach further
into the server software market.

Extending into servers can also help drive more sales of upgrades to desktop
software, he said.

“Microsoft gets a potential two-fold benefit” from pushing into the server
market, said Wilcox.

Antitrust expert Bishop echoed that sentiment, noting that Microsoft’s
market power “allows it to extract more monopoly rent from users of Windows
networks.”

EC spokesman Jonathan Todd refused to comment, saying he would wait for the court to issue its ruling later this year or next.

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