Microsoft: EU’s In Cahoots With Competitors

Microsoft Corp. Thursday accused the European Commission of actively working with the company’s rivals and failing to act as an independent regulator in its ongoing antitrust case against the company.

In an additional response to the commission’s statement of objections — a recent set of arguments explaining why the commission believes the company has failed to comply with its 2004 antitrust ruling — Microsoft says that the commission encouraged “secret contacts” between the company’s rivals, the independent trustee meant to monitor compliance with the case and internal technical experts.

The company says encouraging these contacts “violate[d] … fundamental principles of due process” and represented “direct violations of procedural safeguards aimed at ensuring transparency of the monitoring process.”

As part of monitoring compliance with the commission’s 2004 antitrust decision, which ordered the company to ensure interoperability for its workgroup server software among other rulings, the commission selected an independent monitoring trustee, computer science professor Neil Barrett, from a list proposed by Microsoft. The commission is the European Union’s executive branch and regulatory authority.

But Microsoft argues that the commission encouraged a series of contacts among the company’s rivals, including Sun Microsystems Inc. and IBM Corp., the trustee and E.U. technical experts. These contacts were part of an attempt by the commission to “educate” the trustee “in a manner detrimental to Microsoft,” the document says.

It also alleges that the statement of objections, rather than being an “independent, impartial assessment” of the technology-interoperability information Microsoft has supplied in the case, were “argumentative tracts” developed for the commission with the help of the company’s rivals.

This behavior, the document claims, suggested that the commission, the trustee and Microsoft’s rivals were collaborating in a manner “inconsistent” with the commission’s role as “neutral regulator” and the trustee’s role as “independent monitor.”

A commission spokesman confirmed that body had received a “supplementary response” to the statement of objections it sent to Microsoft on Dec. 21, but declined to immediately comment on the content of the company’s document.

Jonathan Todd, spokesman for E.U. Competition Commissioner Neelie Kroes, said that the commission’s statement of objections was supported by two reports from the independent monitoring trustee.

Todd said that the statement of objections reflected the commission’s initial view that Microsoft had not yet provided “complete and accurate specifications for [the] interoperability information” that the commission’s antitrust ruling required. He also confirmed that hearings for Microsoft to present counterarguments would be held on March 30 and March 31.

Todd added that the commission would decide whether to impose fines, of up to €2 million (US$2.4 million) a day, after the hearings had taken place. The fines would be imposed if the commission decides that Microsoft has not taken steps required by the antitrust ruling. These steps include publishing the information necessary to allow products from Microsoft rivals to interoperate with Microsoft software.

For related coverage, read Microsoft Patent Clash Yields IE Update and Vista Raises More Antitrust Issues for Microsoft.

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-Simon Taylor, IDG News Service