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July 6, 2006

The EU and Microsoft: a pox on both their houses

Posted by David Hunter at 11:22 AM ET.

The pernicious unelected bureaucrats of the European Union really ought to look into using Competition Commissioner Neelie Kroes as their pin-up girl. When she isn’t coming on as a scolding schoolmarm, she runs an interminable process that makes a sieve look tight with her as the head blabbermouth:

The European Union’s Competition Commissioner Neelie Kroes said on Thursday she could see no way around fining U.S. software giant Microsoft for breaching the bloc’s antitrust rules.

Asked by reporters whether Microsoft would be fined for breaching competition rules, Kroes said she could not imagine another way.

So much for the integrity of the proceedings. I also imagine that the scent of big bucks in the offing must be like blood in the water to the perennially penurious functionaries in Brussels. More junkets ahead!

But as long as I am passing out brickbats, Microsoft surely deserves a few for their clumsy approach to dealing with the Eurocrats. The European Commission’s March 2004 judgement against Microsoft was amazingly sparse in the set of nits they decided to pick:

As regards tying, Microsoft is required, within 90 days, to offer to PC manufacturers a version of its Windows client PC operating system without WMP. The un-tying remedy does not mean that consumers will obtain PCs and operating systems without media players. Most consumers purchase a PC from a PC manufacturer which has already put together on their behalf a bundle of an operating system and a media player. As a result of the Commission’s remedy, the configuration of such bundles will reflect what consumers want, and not what Microsoft imposes.

As regards interoperability, Microsoft is required, within 120 days, to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers. This will enable rival vendors to develop products that can compete on a level playing field in the work group server operating system market. The disclosed information will have to be updated each time Microsoft brings to the market new versions of its relevant products.

Microsoft deftly fixed the first one by shipping Windows XP N without Windows Media Player and pricing it the same as regular Windows XP. Then they sat back and had a good laugh while nobody cared.

However, on the second remedy, Microsoft managed to fumble the ball. Microsoft claims they didn’t really know what the Commission wanted until a hearing in April of this year, but there’s a general belief that Microsoft was stiff arming the bureaucrats and got caught. In the press I have seen theories that this was because it meant revealing the “crown jewels” and that Microsoft might even be better off paying the $2.5 million a day fine rather than complying. Sorry, but I’m not buying it.

Work group serving means file and printer sharing with the associated identity and authorization management and that was reverse engineered long ago by the Samba team who only have some arcana in Active Directory left to duplicate because they won’t license the protocols made available under the US antitrust settlement or recently offered by Microsoft to placate the EU too. Anyone who cares to can implement a Samba “work group server” for Windows clients which, if not completely seamless, is at least functional, so it seems to me that the crown jewels were mostly on display already. Admittedly, Microsoft is making some enhancements to the base SMB protocols in Longhorn Server that they would have had to reveal, but I hardly think that they are critical competitive factors.

Of course, there’s another theory that Microsoft set a crew of monkeys to typing to generate the original 12,000 page document rejected by the Commission (subscription required, excerpts here), which gains credibility from the similar problems that Microsoft had in the USA and the current rush effort to create a new document for the EU. If that’s the case, then the current contretemps is even less understandable.

Microsoft’s objective should be to make this problem go away. If they can sweet talk the authoritarian regime in China into cracking down on software piracy, they ought to be able to handle the bureaucratic regime in Europe. Think of it as a cost of doing business.

Filed under Antitrust, General Business, Governmental Relations, Legal, Media Player, Microsoft, OS - Client, OS - Server, Open Source, SMB2, Samba, Technologies, Windows Server 2008, XP N

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4 Responses to “The EU and Microsoft: a pox on both their houses”

  1. EU fines Microsoft with more hits coming -- Microsoft News Tracker Says:

    [...] There’s gold in them thar hills for the perpetually hard up EU bureaucrats! I’ve vented about both parties in this case recently, so I’ll restrain myself now and cut to the chase: Microsoft got off lightly in the 2004 decision, but by not handling the compliance properly and promptly while awaiting their day in court, they are now surrounded by circling bureaucrats who smell blood in the water and who would like to take a bite out of Vista too: European Union Competition Commissioner Neelie Kroes said on Wednesday that Microsoft must take into account the EU’s 2004 antitrust ruling when it launches its new Vista operating system next year. … “I’m consistent in the philosophy and we are absolutely crystal clear what it’s about. So Microsoft is aware of it,” Kroes said, suggesting that the need to comply with EU rules was one reason why Microsoft had delayed the launch of Vista from this year into 2007. Nice of Neelie to comment. The 2004 ruling was specifically only about a bundled media player and the interoperability information, but the feeling is that Kroes is talking more about the spirit than the letter of the decision: In the decision that was intended to set a precedent, it also found that Microsoft harmed competitors by illegally bundling its Windows Media Player with the operating system, leaving consumers with little incentive to buy rival software to watch films or listen to music. [...]

  2. EU threatens Microsoft with further fines -- Microsoft News Tracker Says:

    [...] That explanation of the fine isn’t real clear, but evidently we aren’t talking chump change. As I’ve said before, Microsoft needs to make this problem go away and easily could because this interoperability information is nowhere near their “crown jewels.” Dragging it out just encourages the EU bureaucrats to find something else to complain about and that something might be really be a problem for Microsoft. Filed under Legal, Governmental Relations, General Business, Antitrust, Microsoft [...]

  3. EU court rejects Microsoft antitrust appeal -- Microsoft News Tracker Says:

    [...] On the other side, Thomas Vinje, spokesman for ECIS, European Committee for Interoperable Systems was surprisingly mild and observed that it was time for Microsoft to stop fooling around and start providing the interoperability information required by the judgement. That’s been my opinion all along and now Microsoft gets to do it under the suspicious eye of angry schoolmarm Neelie Kroes who is just itching to find more fault and to apply another ruler across the knuckles.   Filed under Legal, Governmental Relations, General Business, Antitrust, Microsoft   [Permalink] [TrackBack] [...]

  4. Microsoft throws in the towel in EU antitrust fight -- Microsoft News Tracker Says:

    [...] I assume we’ll get to see the full details of the settlement, but the basics are clear: Microsoft executives finally made the problem go away, a course I had been suggesting for quite a while.   Filed under Executives, Steve Ballmer, Legal, Governmental Relations, General Business, Antitrust, Microsoft   [Permalink] [TrackBack] [...]

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