Microsoft Calls on EMC, Others in EU Antitrust Defense

At a hearing with the European Commission on Thursday, Microsoft will use success stories from its server protocol licensing program in the United States to try to convince European regulators that it is complying with an antitrust ruling and avoid being fined millions of euros per day.

Microsoft’s attorneys are to meet with commission representatives at a hearing in Brussels to determine whether the software maker complied with the regulators’ 2004 antitrust ruling against it. The commission contends that the company has not complied, and is threatening to impose daily fines of 2 million euros (US$2.4 million) until it does.

At issue is a provision that required Microsoft to license communications protocols for its workgroup server software to competitors, a measure intended to level the playing field by allowing them to build products that work well with Microsoft’s ubiquitous Windows software. The company was required to offer a similar licensing program in the United States after it was found guilty of antitrust violations there.

Microsoft will submit statements to the commission on Thursday from six technology companies that successfully used that U.S. licensing program, it said. Among them is EMC, which used the documentation “as a reference guide to fill in gaps in EMC’s existing implementation of the file server protocols, particularly the SMB protocol,” the statement from EMC says, according to Microsoft.

The other companies include storage vendor Network Appliance, videoconferencing vendor StarBak Communications, and video-on-demand vendor Tandberg Television.

Forty-six of the 55 protocols offered under the European licensing program are also part of the U.S. licensing program, according to Microsoft.

It was not immediately clear, however, if the protocols are documented in the same way, and if the testimony of vendors who took part in the U.S. program will sway the commission’s view.

“What we’re saying is that the documentation has been created to the same standard,” Microsoft spokesman Tom Brookes said.

Microsoft repeated its assertion that it wants to comply with the commission’s requirements but argued that it needs “concise and consistent information” about what is required.

The company invited several industry analysts to view its European protocol documentation in London recently, in an effort that was “partly public relations but also to get our view on how the documentation looks,” said Gary Barnett at U.K. analyst company Ovum, who was among those who attended.

“I was really surprised when I saw the documentation they had put together. I was expecting, based on what I had heard, something much less complete. But I’d have to say—with the caveat that this is based on the two or three examples they showed us—that it was quite impressive,” he said.

One of the problems, he said, is that the usefulness of the documentation depends partly on whom it’s intended for.

“Should [Microsoft] be providing a document that would allow a first-year computer science student to create an entire protocol, or are they entitled to assume that if you’re setting up business to implement the protocols that you’ll hire a few Microsoft platform Jedis?” he asked.

“That’s not clearly enumerated, and it’s the fault of the European Union for not making it clear, and it’s also Microsoft fault for agreeing to comply with such a request.”

James Governor, an analyst at RedMonk who also saw the documentation, said “it’s a system that kind of works.” The problem, he said, is that companies don’t want to have to become Microsoft licensees in order to make competing products, and the fees Microsoft is proposing for the licensing program are too high for small companies.

Microsoft had been scheduled to hold a press conference early Thursday afternoon, but it canceled it late in the morning, citing a “request to respect the confidentiality of the process” from the commission’s hearing officer.

-James Niccolai, IDG News Service

For related news coverage, read EU Warns Microsoft Over Vista Features and Microsoft Tries to Placate EU … Again.

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