Microsoft to EC: Can’t We Just Talk?

Microsoft  doesn’t want a hearing; it wants a

The company today filed its official response to the European Commission’s Competition Committee’s Statement of Objection (SO), issued in March, which accused Microsoft of charging
monopoly prices for interoperability protocols for its Windows Workgroup

But the software vendor, which had until the end of the month to respond, said it
wants the commission to tell it what its prices “must be in order to qualify
as ‘reasonable.'”

“We need greater clarity on what prices the commission wants us to charge,
and we believe that is more likely to come from a constructive conversation
than from a formal hearing,” said Microsoft attorney Brad Smith in a

Smith also confirmed that the company did not request an oral hearing
relating to the SO.

Microsoft spokesperson Anne-Sophie de Brancion added that Microsoft believes
a more cordial discussion will achieve the commission’s aims more quickly
than a protracted legal battle.

Now, she told, “the ball is in the commission’s

The commission confirmed receipt of Microsoft’s response, and said it will
now “decide whether to impose a daily penalty on Microsoft for failure to
comply with the March 2004 decision.”

Microsoft faces fines of up to $4 million per day, retroactive to December
16, 2005.

But the commission doesn’t like repeating itself.

The current stalemate
resembles Microsoft’s stance over the introduction of Vista into the
European Union. Microsoft spent months asking the commission for greater
clarity over what it could legally include in the new operating system, and
the commission systematically responded by saying that Microsoft would find all the answers it needs in its March 2004 decision.

Both sides agree that Microsoft will license protocols to its
Windows Servers on “reasonable and non-discriminatory terms.” Microsoft has
argued that it is entitled to royalties on those protocols because they
have inherent value.

The commission’s position, however, is that Microsoft’s protocols for the most part do not constitute meaningful innovation and should therefore be
offered free of charge or for nominal sums. Microsoft argued that it has
been issued over 30 patents for those protocols, proving that it must
have innovated somewhere.

Microsoft’s approach this time around is far less bellicose than last year, when it took the unusual step of posting its official response to an earlier SO on this same issue.

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