Microsoft ‘Plays Chicken’ With EC

In an unusual step, Microsoft has posted (PDF file) its official response to objections from European regulators that the software giant is dragging its feet in a long-running antitrust dispute.

Microsoft said in its response that the future “appears bleak” for transparency and fairness in dealing with the European agency.

The software giant filed the response on Feb. 15 in an attempt to prevent the European Commission from levying huge fines against Microsoft for noncompliance with a 2004 antitrust ruling.

As part of the settlement, Microsoft agreed to open
its Windows operating system to outside software developers. Since that
agreement, both European regulators and
Microsoft have argued how fully the software firm has complied.

“Microsoft is in full compliance” with the documentation requirements
of the 2004 ruling, the company said in a statement. In December
2005, the EC issued a Statement of Objections, followed by a Feb. 15
deadline for Microsoft to respond or face fines that could reach $2.4
million each day.

In the 78-page response, Microsoft charges the EC has made it
difficult to comply by changing which documents were required and not
bothering to read the documents the company submitted.

“The Commission waited months before informing Microsoft that it
believed changes were necessary to the technical documents, and then
gave Microsoft only a few weeks to make extensive revisions,” the company said in the response.

After the EC issued its official objections on Dec. 21, 2005, the
regulators “had not even bothered to read the most recent version of
those documents which Microsoft had made available on Dec. 15, 2005,”
Microsoft said.

“If the commission may issue a Statement of Objections and seek to
impose massive fines for noncompliance under these circumstances, then
the future of transparency and fair process in European competitive
proceedings appear bleak,” the company continued in its response.

Stacy Drake, Microsoft spokesperson, said in a statement that transparency is vitally important in what can be a very opaque
process in Brussels. “And as such, we decided to post our response so
people can understand the issues at stake in the case,” she added.

Joe Wilcox, a
Jupiter Research analyst told internetnews.com that we’ve now reached a game of ‘chicken.’ Both sides are now playing to the court of
public opinion.”

Jonathan Todd, EC spokesperson told internetnews.com that it is very unusual for a company to post its response to a Statement
of Objections on its Web site.

The EC will “carefully consider” Microsoft’s response
and will hold an oral hearing on the matter “likely to take place in the
coming weeks,” according to a statement from the body.

Microsoft said it spent 30,000 hours compiling 12,000 pages of
technical documentation it offers for licenses. Neil Barrett, a computer
scientist and trustee in the case, has told the EC the documentation was
flawed.

To counter Barrett, Microsoft included a 49-page report from five UK
and German computer science professors that support the software
company’s attempts to supply documentation.

“We conclude that the interoperability information as provided by
Microsoft meets current industry standards,” according to the report.

Along with the EC, Microsoft posted a response to the Korean Fair
Trade Commission report. In December 2005, the South Korean agency
announced Microsoft must offer a version of Windows that doesn’t include
the software giant’s media player and instant messaging application.

“If allowed to stand, this decision will have a negative effect on
Korean consumers and Korean innovation,” according to Microsoft’s online
statement. Microsoft vows to appeal the ruling.

Earlier this week, the European Committee for Interoperable Systems,
composed of rival tech companies, asked the EC to investigate Microsoft
bundling productivity applications, such as Office, with the Windows
operating system.

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