Microsoft Taps Legal Czar Amid EU, OOXML Woes

Microsoft (NASDAQ: MSFT) announced Monday it has hired a former European diplomat to lead its dealings with the European Union (EU). The company’s aim is to help the company face down legal and regulatory threats, among which are investigations regarding its controversial document interchange formats.

Meanwhile, a fourth nation has appealed the recent ratification of those formats as an International Organization for Standardization (ISO) standard.

Slated to start July 1, former General Electric executive John Vassallo will be Microsoft’s vice president of EU affairs as well as associate general counsel. At GE, he was senior counsel and director of European affairs. He has also previously served as Malta’s ambassador to the EU, NATO and Belgium.

Vassallo’s hiring comes at a time when Microsoft has been only partially successful in putting its legal woes behind it, particularly in the EU.

“The creation of this role reflects the increasing importance of Microsoft’s engagement with the European Union across a wide range of policy areas,” the company said in a statement announcing Vassallo’s appointment.

One of the areas he will have purview over is Microsoft’s continuing contretemps with the European Commission (EC), the EU’s executive branch, which has levied the largest fines in EU history against the company for abusing its market dominance.

The company is currently under investigation for possible improper business practices during the recent ISO standards effort.

Meanwhile, the vocal debate between supporters and detractors of granting Microsoft’s Open Office XML (OOXML) formats worldwide standards status cranked up another notch.

Last week, just as time ran out for nations involved in the ISO’s OOXML process to file appeals, three countries did just that — South Africa, Brazil and India. That was followed over the weekend by a fourth appeal, this one from Venezuela’s standards body, according to published reports.

That puts OOXML — now renamed IS29500 — in limbo until the appeals are sorted out. Until then, OOXML is not officially a standard.

All of this is a familiar world for John Vassallo.

Still, whether bringing in a European legal heavy hitter and diplomat to manage Microsoft’s EU corporate and regulatory affairs unit will change the company’s fortunes in the face of a steady stream of attacks by the EC remains to be seen.

However, it’s certain that Vassallo will have his hands full from the get-go.

Despite the fact that Microsoft settled its long-running antitrust case with the EC last fall, the ripple effect of the landmark court ruling that forced Microsoft to pay record EC fines is still reverberating through the EC’s legal channels.

For instance, the EC announced in February that it is investigating whether OOXML is “sufficiently interoperable with competitors’ products” to put those companies on equal footing with Microsoft.

In addition, the EC is investigating whether Microsoft should be forced to unbundled Internet Explorer from Windows in EU markets.

The company has been steadfastly trying to rid itself of the distraction and burden of litigation on all fronts since last year. The EU has been a particularly distracting set of markets.

However, the company drew the line in May when it appealed an additional $1.35 billion fine ordered by the EC for dragging its feet in providing interoperability information to competitors in the workgroup server market.

Meanwhile, the EC has said it is also looking into whether any of Microsoft’s rumored strong-arm tactics in pushing OOXML through the ISO “fast track” standards process violated EU laws and regulations.

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