Microsoft: We’re ‘in Full Compliance’ With EU

Microsoft  has until April 23 to respond to the European Competition Commission accusations that it is abusing its monopoly power. But instead of waiting till then, the company decided to publicize in advance the main points of its side of the story.

Responding to accusations by the commission
that it is abusing its monopoly position by charging exorbitant fees for
interoperability licenses, Microsoft spokesman Tom Brookes told
internetnews.com that “the terms on which we have made the protocols
available are reasonable and nondiscriminatory.”

While the contents of the commission’s March 1, 2007, Statement of Objections (SO) still remain confidential, Microsoft is publicizing its
talking points ahead of the April 23 deadline for a response. Microsoft is making the argument that its technology is indeed innovative; the company is also asking for fair compensation for the use of that innovation.

Microsoft believes its “technology is innovative because it includes 36
patents issued by U.S. and European patent offices, with another 37 patents
pending,” Microsoft spokesman Jack Evans told internetnews.com.

These statements are direct rebuttals to claims made by the commission in a
statement issued on March 1 summarizing the contents of the SO. In that
statement, the EU’s Commission accused Microsoft of violating the terms of
its March 2004 decision, which obligates the Redmond, Wash.-based software vendor to make its
licensing protocols available to rivals on reasonable terms.

The commission said its “preliminary view is that there is virtually no
innovation in the 51 protocols … where Microsoft has claimed non-patented
innovation.”

The commission also said in the statement that, of the total
160 instances where Microsoft has claimed innovation, “only four represent
even a limited degree of innovation.”

If Microsoft were to lose this fight, it faces fines of $4 million per day,
retroactive to Dec. 16, 2005, which already amounts to more than $1.3
billion.

The war of words is sure to continue. Brookes said that the company will
respond fully to the SO by the April 23 deadline set by the commission, but
noted that “we believe we are in full compliance with the March 2004
decision.”

The confrontation over interoperability has been brewing
for over two years, and a little over one year since the EU laid down the
law for Microsoft.

Microsoft recently trumpeted an agreement with Quest Software  as proof that
its licensing arrangements are considered fair in the market. Evans also
noted that its position is “supported by the analysis conducted by
PriceWaterhouseCoopers that found that our pricing is at least 30 percent
below that of comparable technology in the marketplace.”

No one at the commission, which is closed for the holiday until next
Tuesday, was available to comment.

This is not the only fight between Microsoft and the EU’s
Competition Commission. Microsoft is appealing a $613 million fine it already paid. A decision on that issue is expected
sometime this year.

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