Microsoft provided inadequate interoperability data on its work g...
Microsoft provided inadequate interoperability data on its work group server systems and wants royalties that are too steep, the EC said Thurs. in a preliminary ruling. In 2004, the EC found that Microsoft broke EU competition law by using…
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a near-monopoly in PC operating systems as leverage in the market for work group server operating systems. Microsoft was told to reveal full and accurate interface documentation on “reasonable and nondiscriminatory terms” to allow work group servers from other companies to run with Windows PCs and servers. Microsoft agreed to base royalties on whether its protocols are innovative. But a provisional EC “statement of objections” found no “significant innovation” in the interoperability data, meaning Microsoft’s proposed royalty rates are unreasonable, the EC said. The company offers a choice of 2 licenses to companies seeking interoperability data under the 2004 decision. The “no patent” contract lets licensees use the protocols made up of the interoperability data without getting a license for patents that Microsoft claims are necessary but that are disputed by 3rd parties. The “all IP” agreement combines the first license with a license for the disputed patents. The EC said its preliminary view is that there’s “virtually no innovation” in the 51 protocols in the no-patent agreement, representing over 95% of the price of the total technical documentation. And most material on the all IP license relates only to solving Windows-specific problems and won’t help a licensee’s operating system work better, the EC said. Microsoft has 4 weeks to respond, and a right to a hearing, after which the EC can assess daily antitrust penalties up to 5% of average daily turnover the preceding business year. The EC stressed that yesterday’s decision isn’t final. The Assn. for Competitive Technology, which has often spoken up for member Microsoft, blasted the EC for sapping European intellectual property (IP) protection. “Despite the presence of 40 patents and numerous trade secrets in the protocols in question, which they haven’t reviewed, the Commission feels that they can announce there is little or no innovation contained within,” said Pres. Jonathan Zuck. With much of the world seemingly embracing IP’s value, the EC is going backward, he said. No wonder a recent report found Europe lagging behind other regions in innovation, Zuck added.