EC Balks at Microsoft Claim of Full Compliance

Published: February 22, 2006

by Alex Woodie

The showdown between Microsoft and the European Commission continues, as the February 15 deadline for complying with a March 2004 ruling came and went, and the prospect of steep fines for Microsoft grows greater. In separate statements last week, the two sides appeared at loggerheads, with the EC repeating its warning that Microsoft's technical documentation was insufficient, while Microsoft claims it has fully complied with the EC, and moreover, that it has been denied due process.

The two sides are at odds over the steps Microsoft has taken to comply with the EC's March 2004 decision, which required the software giant to make it easier for competitors to write applications for the Windows Server 2003 operating system. Microsoft came up with a 12,000-page report in response to that finding, and claims that document adequately describes the use of the "communications protocols" in the operating system.

However, the EC says Microsoft's 12,000-page document failed in its goal, is too complex, and, despite its length, is incomplete. These findings are based on the analysis conducted by a mutually agreed upon independent technical expert.

Microsoft has taken two additional steps to satisfying the EC beyond the submission of the 12,000-page document. It has offeed competitors hundreds of hours of technical assistance to help them write Windows Server applications, and, more recently, offered to share the source code of the operating system.

Last Wednesday, Microsoft formally submitted to the EC its latest plan for complying with the EC's March 2004 decision; the plan was expected to heavily rely on the sharing of Windows source code as a means toward compliance. The EC had set February 15 as the final deadline for Microsoft to submit satisfactory compliance plans before the EC begins to institute daily fines of $2.4 million. If it did start fining Microsoft, the EC would backdate the fines to December 21, which is the day the EC issued its "Statement of Objections," similar to an indictment in the U.S. court system.

A final decision by the EC concerning Microsoft's compliance, or lack of compliance, with the commission's 2004 decision is not expected for the next several weeks. In the meantime, it appears likely that the EC will grant Microsoft's request for an oral hearing. A final decision will follow the oral hearing, the EC says.

The EC had previously warned Microsoft that sharing source code would not, in itself, satisfy the requirements of the 2004 decision. Last week, the EC again asked Microsoft to explain how source code was relevant to the discussion.

"Source code could at best complement the provision of complete and accurate specifications, in line with the Commission 2004 Decision," the EC stated in a press release. "The onus is on Microsoft to explain in their reply to the Statement of Objections precisely how and why the source code offer is relevant to ensuring their compliance with the March 2004 Decision."

Meanwhile, Microsoft is still making the case than its 12,000-page document should have been enough, which is a curious tactic considering it has already taken steps beyond that document.

"Hundreds of Microsoft employees and contractors have worked for more than 30,000 hours to create over 12,000 pages of detailed technical documents that are available for license today," Microsoft said in its 75-page response to the EC filed last Wednesday, parts of which it repeated in a press release last week.

While the EC relied on the work of a British IT consultant named Neil Barrett to gauge the effectiveness of Microsoft's 12,000-page document, Microsoft apparently hired its own team of British and German computer science professors to judge the document. According to Microsoft, the group found the software giant had done everything reasonably possible to explain the use of the communications protocols.

"We believe that it has provided complete and accurate information, to the extent that this can be reasonably achieved, covering protocols, dependencies, and implicit knowledge," the five-person team said in a 49-page report, a portion of which Microsoft shared in its press release.

Besides fundamentally disagreeing on the real substance of the case--that Microsoft hasn't adequately changed its business practice in response to the legal finding that it abused its near monopoly on desktop operating systems to tackle the market for workgroup server operating systems and media players in Europe--the two sides also engaged in some tit-for-tat bantering that's largely petty in nature, and which shows no sign of letting up, despite the current armistice agreed upon by more than a 100 countries participating in the Winter Olympics.

Microsoft, for its part, said the EC and its consultant "had not even bothered" to read the most recent version of the 12,000-page document submitted a week before the Statement of Objections was handed down on December 21. In its response to that accusation, the EC says Microsoft had its dates wrong, that the new version wasn't even supplied to the EC until December 26, and that, moreover, there was nothing "substantially different" about that document, anyway.

Undeterred, Microsoft's legal team continued onward, and complained that the company was given "only a few weeks" to make "extensive revisions" to the document (which, as the EC claims, wasn't much different, anyway.) "The Commission waited many months before informing Microsoft that it believed changes were necessary to the technical documents, and then gave Microsoft only a few weeks to make extensive revisions," Microsoft stated in its response to the EC, according to the press release. In summary, Microsoft says " . . the Commission had ignored key information and denied Microsoft due process in defending itself."

In its defense, the EC asserted its sanctity and its power. "It is of course the European Commission that will decide whether Microsoft is compliant with the March 2004 Decision, and not Microsoft," the EC stated in a press release.

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