Microsoft offers EU concessions

Posted 12:14PM on Tuesday 12th March 2002 ( 23 years ago )

BRUSSELS, BELGIUM - Seeking to resolve its antitrust woes in Europe, Microsoft Corp. is proposing concessions that go beyond those agreed to in the United States to help rivals ensure their equipment can operate with its dominant Windows software. Microsoft's chief European attorney, John Frank, said the two new measures are in addition to steps included in the software giant's proposed settlement with the U.S. Department of Justice, but are related. ``All go toward increasing the amount of information we share and thereby helping interoperability,'' he said in a telephone interview from Paris. Microsoft opponents attacked the announcement as a ``public relations exercise'' that fell far short of addressing the anti-competitive charges made by the European Union. ``This ain't going to cut the mustard,'' said lawyer Thomas Vinje in the Brussels office of Morrison & Foerster, which represents a U.S.-based industry group that opposes Microsoft. Regardless of its actual value, the latest move is more evidence of Microsoft's switch to a more conciliatory tone in recent months as it strives to settle the EU case and avoid a hefty penalty, outside lawyers said. Last December Microsoft waived its right to a hearing, saying it wanted to focus on a reaching a settlement. The EU said last August that it believed Microsoft was abusing its dominant position in desktop software to horn in on the market for servers, which link personal computers in networks. Rivals like California-based Sun Microsystems charge Microsoft illegally withheld key data it needs to allow non-Microsoft servers to communicate with computers running Windows. Frank said Microsoft's recent unilateral initiatives were intended to address two of the key concerns expressed in the EU's August statement of objections. Microsoft submitted information on its proposed modifications to an encryption standard called Kerberos to an industry body two weeks ago, he said. Kerberos protects passwords that get sent over networks by encrypting them. By August, Microsoft also will license the SMB file-sharing protocol around another of its standards, known as Common Internet File System. SMB allows computers tied into a network to talk to the server. ``We're making good on our commitment to address the areas of concern,'' Frank said. EU spokesman Michael Tscherny said the commission had yet to receive the proposals and so he could not comment on them. But Vinje, representing the Computer and Communications Industry Association, said Microsoft's proposals are insufficient because they address only a couple of problems from the past. ``I'm pretty sure the commission is not going to be satisfied with being solely backward-looking in its remedy,'' he said. ``They're going to insist on a broadly based remedy, formulated in a way that it has teeth and is effective into the future.'' The CCIA has joined the EU case as an interested third-party. Its membership includes Netscape Communications Corp., Intuit Inc., AT&T Corp., Oracle and Sun. Vinje said the group would not be satisfied with anything less than requiring Microsoft to ``disclose interface specifications necessary to achieve true server-operating system compatibility.'' While EU regulators initially said a decision would come early this year, they have suggested recently the decision may be delayed until after the U.S. court rules on whether to approve the settlement worked out by Microsoft and the Bush administration. Under EU law, the commission could fine Microsoft up to 10 percent of its worldwide sales if it finds it guilty of antitrust violations. The three-year-old EU case also charged that Microsoft may be violating antitrust laws by bundling its Media Player into its Windows operating system, giving it an unfair advantage over competing products. Frank said the concessions in the U.S. consent decree ``address that quite precisely'' by requiring disclosure of information and giving third parties the right to add features to Windows and set them as defaults. Vinje said he did not believe that would be enough to satisfy the EU. Frank, however, urged EU regulators not to stray too far from the U.S. settlement, saying its important for the global marketplace. ``It's not workable to have a set of rules emerge in Europe different from what's emerged from the four years of litigation'' in the United States, he said.

http://accesswdun.com/article/2002/3/197596