Microsoft and the European Commission. If you would like to help with this, leave a comment!
Created by quux on Jun 24, 2008
Last updated: 03/06/10 at 11:30 AM
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Ars Technica story. MSDN start page for the new docs. MS press release says: Highlights of the actions announced today include: posting Version 1.0 releases of technical documentation for Microsoft protocols built into Microsoft Office 2007, Microsoft Office SharePoint Server 2007 and Microsoft Exchange Server 2007; posting nearly 5,000 pages of new technical documentation for the Microsoft Office binary file formats for Word, Excel and PowerPoint (.doc, .xls, .xlsb and .ppt); and making significant strides in the company’s efforts to foster more open engagement with other members of the IT community. “Today’s actions represent Microsoft’s continued fulfillment of the commitments it made in its Interoperability Principles,” said Craig Shank, general manager of Interoperability at Microsoft. “Microsoft’s cumulative posting of approximately 50,000 pages of technical documentation on MSDN provides consistent, open access for all developers, which enhances the ease and opportunities for working with Microsoft’s high-volume products. Moreover, our work with partners, competitors and customers to engage in the technical nuts-and-bolts of real-world interoperability provides great ongoing opportunities for collaboration to address the challenges of today’s diverse IT environment.”
Microsoft announces four broad new interop principles: (1) ensuring open connections; (2) promoting data portability; (3) enhancing support for industry standards; and (4) fostering more open engagement with customers and the industry, including open source communities. 30,000 pages of information about client and server protocols are published on MSDN. The information was previously only available via WSPP and MCPP paid programs. See also The Register's coverage. For continuing program information, see Microsoft's interop site.
EUC opens two more investigations of Microsoft. 1) Illegally tying Windows and Internet Explorer. Complaint made by makers of the Opera browser. 2) Office 'not compatible enough' with competitor products. Complaint made by ECIS (a coalition of MS competitors).
Samba team receives MS protocol docs. Tridge writes an interesting history of the process that led to this, and an analysis of the €10K 'without patents' agreement. It is worth note that PFIF can share them with any OSS dev - not just limited to Samba devs.
Deadline for appeal of CFI decision. Neither MS nor EUC appealed, so it is final.
In a press release, Microsoft said that they had formally withdrawn their remaining two appeals of the CFI's Sept 17 2007 decision.
MS reduces patent royalty fee to 0.4%; docs without patent access will cost €10,000 onetime fee. EUC (Kroes) says "I welcome that Microsoft has finally undertaken concrete steps to ensure full compliance", which seems to indicate that they are concluding this battle.
Microsoft's response to the CFI ruling is mainly platitudes Brad Smith (MS head lawyer) says: "I think we need to read the decision before we make any decisions. I believe in these kinds of things that although there's a lot of drama, one needs to step back and read first, think second, and decide third, and I think that's the right order, and that is the order in which we're going to take this."
CFI rules affirming EUC ruling and penalties.
The ruling also decides who pays legal fees and how much.
New York Times coverage
MS reduces patent royalty rate to 0.7%. No public response from EUC at this time. (Date taken from the Feb 27 2008 EUC press release explaining fines for charging too much.)
MS press release says that it has submitted the response mandated by the March 1 warning (EUC had originally allowed 4 weeks for response, but granted a 20-day extension). It also asks for guidance on what it should be allowed to charge: Microsoft also confirmed that it was not requesting an oral hearing relating to the Statement of Objections. Brad Smith, Senior Vice President and General Counsel of Microsoft Corporation, said: “We continue to seek to resolve these recent issues. We need greater clarity on what prices the Commission wants us to charge, and we believe that is more likely to come from a constructive conversation than from a formal hearing.” EUC confirms receipt of the response tersely. In CNET coverage, Neelie Kroes talks about structural remedies.
The Financial Times says it has seen a confidential document stating: "Microsoft wants up to 5.95 per cent of companies’ server revenues as a licence fee. But the confidential statement of objections from the Commission in the long-running dispute makes clear that Microsoft will at best be allowed to levy a tiny fraction of the royalties it is demanding. According to calculations by the Commission’s technical expert, Prof Neil Barrett, Microsoft’s demands would mean that rivals could recoup their development costs after seven years. The Commission’s expert, who was suggested for the post by Microsoft, goes on to calculate that even an average royalty rate of 1 per cent would be unacceptable for licensees. Prof Barrett states that a 0 per cent royaltywould be “better” and adds: “We can only conclude on this basis that the Microsoft-proposed royalties are prohibitively high [...] and should be reduced in line with this analysis.” Three Microsoft rivals that have reviewed the group’s pricing scheme extensively – understood to be IBM, Sun and Oracle – come to the same conclusion: “The prices charged by Microsoft are prohibitive and would not allow them to develop products that would be viable from a business perspective,” the Commission charge sheet says."
In a press release responding to the EUC warning, MS says: “First, we believe we have been fair in setting proposed protocol prices, and an analysis by PricewaterhouseCoopers found that our proposed prices were at least 30 percent below the market rate for comparable technology. “Second, other government agencies in both the United States and Europe have already found considerable innovation in Microsoft’s protocol technology. US and European patent offices have awarded Microsoft more than 36 patents for the technology in these protocols, which took millions of dollars to develop, and another 37 patents are pending, so it’s hard to see how the Commission can argue that even patented innovation must be made available for free. “Third, the proposed findings suggest that unless our intellectual property is innovative and patentable, it has to be made available royalty free. That has never been the standard for software or other intellectual property, and it misstates the test agreed to by the Commission and Microsoft in June 2005, which has been available on Microsoft’s website since that time. “Fourth, the findings appear to attempt to regulate the pricing of our intellectual property on a global basis and not just within the EU. We believe it’s unwise for governments to regulate pricing beyond their borders and that if other authorities all took similar views of their power, companies would be unable to comply with contradictory rulings. “And fifth, we’ve always said we are willing to entertain any reasonable price offer from any potential licensee, and that we are willing to be flexible to meet any unique business needs of potential licensees. Currently, we’re in negotiations with a number of potential licensees.”
EUC's press release says: "The Commission's preliminary view is that there is virtually no innovation in the 51 protocols in the 'No Patent Agreement' where Microsoft has claimed non-patented innovation, and that Microsoft's current royalty rates for this agreement are therefore unreasonable. This takes into account the advice of both the Monitoring Trustee (see IP/05/1215) and the Commission's technical advisors, TAEUS, who both consider that there is no innovation in any protocol in the Gold and Silver categories. These protocols represent more than 95% of the price of the total Technical Documentation. The Trustee considers that of the total of 160 claims, only four, relating to relatively minor Bronze protocols, represent even a limited degree of innovation." It also says "The issue of whether the interoperability information is complete and accurate is still under consideration by the Commission." EUC does not make any public suggestion as to what MS should charge. They also released a FAQ about the warning, addressing questions about the legal basis and possible amounts of penalty fines, the question of OSS access to the protocols (EUC intends to make sure this happens), backround information, and more.
In a press release issued on this day, MS says: "In accordance with the March 2004 decision by the European Commission, Microsoft submitted 8,500 pages of detailed technical documentation in July 2006. The Commission has now completed its initial review of this extensive documentation. The documentation is now available for review by any potential licensees. "
Although there are no press releases or new reports of the event on this date, in their March 1 2007 press release Microsoft says: "“Microsoft has spent three years and many millions of dollars to comply with the European Commission’s decision. We submitted a pricing proposal to the Commission last August and have been asking for feedback on it since that time. We’re disappointed that this feedback is coming six months later and in its present form, but we’re committed to working hard to address the Commission’s Statement of Objections as soon as we receive it."
Microsoft's head lawyer Brad Smith holds a press conference where he answers questions and discusses (among other things): Have met every deadline since having "gotten clarity" in April.Top priority is to meet final deadline in 2 weeks (July 24)."The decision itself, despite its voluminous nature, has only five words that describe the way these documents were supposed to be written. Those five words are "complete and accurate technical specifications". That's the only thing we were given in 2004 that describes how to write these."beat the original Dec 2004 deadline by 10 days, submitting over 10,000 pages of docsvery little feedback from EUC in 2005; didn't even hear from them until June.Barrett (the newly appointed trustee) added a lot of clarity to the process in April by providing templates Since April, 300+ people working fulltime to provide the docsDiscussion of grounds for appeal to the EUC decisionDiscussions of milestones prior to the July 24 deadline for documentation The entire discussion is worthy of your time to read it.
MS docs for workgroup protocols still not good enough. EUC fines MS $357M (€280M), backdating €1.5M/day to Dec. 15. Note this fine is levied 2 weeks before the latest agreed deadline for document submissions, and Neelie Kroes had recently said Microsoft was doing an "extremely good job". MS now has over 300 people working on writing docs to satisfy EUC's changing demands. Additionally, today's fine signals the EUC's rejection of Microsoft's June 12 offer to license source code to competitors.
MS offers full source code. EUC is skeptical.
Microsoft responds to EUC's Dec 22 Statement of Objections.
EUC releases another Statement of Objections.
EUC says 'still not good enough' and warns MS of daily €2M fines if said documentation isn't good enough by Dec 15 2005. It later extends this deadline several times. See also this FAQ release.
EUC appoints Niel Barrett to assist them in monitoring MS compliance. Barrett was on a 'short list' chosen by Microsoft.
MS submits another round of docs to EUC and potential licensees.
EUC appoints Niel Barrett to advise MS on creation of docs.
EUC says Microsoft's protocol documentation as published so far is not good enough.
Windows XP 'N' versions are released to OEMs. It took ~9 months. The 'N' versions will be released for public purchase on July 2005 (~15 months after first EUC decision, though EU had removed their hard deadlines for compliance). Side note: the above link includes the exact list of files removed in XP 'N', which may be interesting to those of you who wish 'N' was available in the US.
CFI dismisses petition for penalty and remedy suspensions. The appeal for annulment continues. MS gets to work on implementing the remedies EUC wants.
MS asks CFI to suspend EUC penalties and remedy deadlines pending outcome of annulment proceedings. EUC voluntarily decides not to enforce 90 and 120 day deadlines. Specifics of MS' arguments are included in the Dec 22 2004 timeline item.
MS asks Court of First Interest (CFI) to set aside the EUC ruling. In the timeline graphic I use the word 'annul' for brevity. The arguments and their resolutions are found in the Sept 17 2007 timeline item.
Ballmer comments. Baller/Smith press conference. Brad Smith press conference MS press release saying MS proposed settlement would have been better: "During months of discussion and settlement negotiations leading up to today's decision, Microsoft offered wide-ranging proposals to address issues regarding interoperability and the integration of media player functionality into Windows® . The company proposed to provide competitors with unprecedented access to its technology. In addition, under Microsoft's proposed settlement, any personal computer sold with the Windows operating system also would have carried three non- Microsoft media players, leading to the distribution of more than 1 billion competing media players over the next three years. At the Commission's insistence, many of the provisions offered in Microsoft's proposed settlement were worldwide in scope."
EU commission hands down its final, 302 page ruling. Here's their summary press release and FAQ. MS is fined $613M (€497M). MS has dominant position in PC operating systems market, and illegally leveraged it into other markets by 1) bundling Windows Media Player and 2) not giving complete 'workgroup server' implementation info to competitor who asks. It must within 90 days release Windows N (no Windows Media Player). Within 120 days it must completely document all of its 'workgroup server' interfaces and technologies. MS reaction statement.
MS press release quoting a few short remarks from Mr. Ballmer. "unable to agree on principles" A separate MS press release says substantially the same thing, but includes comments from Brad Smith, MS head lawyer.
EUC press release containing Mr. Monti's breif statement saying an agreement was not reached, and urging the Commission to make a ruling within a week.
PDF document summarizing Advisory Committee findings.
EUC issues third Statement of Objections. I have not yet found fulltext of either the statement or Microsoft's response.
EUC issues second Statement of Objections.
I have not yet found fulltext of either the statement or Microsoft's response.
EUC issues first Statement of Objections and proposed remedies. I have not yet found fulltext of either the statement or Microsoft's response.
EUC expands its investigation to include the question of whether bundling Windows Media Player (WMP) in with Windows constitutes abuse by 'tying'. This is done on their own initiative, though aparently EUC has received complaints. MS announces they will cooperate.
Dec 10 1998: Sun forwards these two letters (apparently no other correspondence occurred) and a complaint to the EUC, saying basically: Make them give us what we want!
This apparently kicks off the EUC investigation. I can find no other date of a formally announced investigation.
Sept 15 1998: Sun's Richard Green writes to MS saying in effect 'give us everything we will need to know in order to build a Sun server that implements all of the MS Active Directory technologies'. Microsoft's Paul Maritz answers on Oct 6, basically saying 'We are not planning to port AD server techs to Solaris at this time. Everything you need to know to make an AD client is on MSDN, though. Please come to our conference where extra info can be had, and I've told one of our Lead Program Managers here to make himself available for your technical questions.'
Exact text of these letters can be found paragraphs 2-5 under "Background to the dispute" in the Court of First Instance's decision.
European Commission: the Microsoft Case - also their library of docs for the case. Microsoft: Press releases re: EU Commission. Seattle Post Intelligencer: Todd Bishop's Microsoft Blog and tag/timeline thingy. ECIS (a consortium of MS competitors) has a timeline, ironically in MS .doc format.