Microsoft: European Conflicts

The European Commission fined Microsoft 497 million Euros for misconduct in the market place.

Two complaints were made against Microsoft:

The first accusation was that Microsoft 'illegally tied the availability of Windows to Windows Media Player, making it impossible to obtain the former without the latter, and so distorting the market in media Players.'^[1]

The Second complaint was that "Microsoft enagaged in conduct designed to make it difficult for other companies or organisations to write software with interoperates with Windows in particular important ways."^[2]

The European Commission demanded that Microsoft remody the situation and stipulated that Microsoft produced a version of Windows with the Windows Media Player. However, although Microsoft have complied they have attempted to undermine these stipulations. Firstly they suggested that the new versions would be given "Not with Windows Media Player" labels. The EU did not agree to this and so following further negotiations they agreed to "Edition N"

Microsoft have retailed the new versions at the same price as the older version, ensuring its failure in the market place.

The second remody demanaded that Microsoft publish the specifications of the CIFS protocol. However, Microsoft provided further barriers to this demand. The main competitor in the CIFS server space is a free software project named Samba. Samba are generally a generation behind Microsoft as the have to "reverse-engineer all the behaviuor from scratch."

"For example, machines in Windows domains which talk to each other using the latest versions of CIFS use a machine acting as an Active Directory Domain Controller to keep order. At the moment, Microsoft has a monopoly on these Domain Controllers - the code is built into the expensive Server versions of Windows 2000 and Windows 2003."^[3]

The information that would have to be publish would assist Samba in catching up with Windows and would make the more expensive Microsoft products redundant.

Microsoft have not fully complied with the demands set and the EU's Monitoring Trustee ruled that "using the current documentation to implement anything would be "frustrating, time cinsuming and ultimately fruitless." Thus, the EU ruled that unless Microsoft fully complies 'by the end of January, it will be fined £1.5 million per day,back dated to Decemnber 15, for non compliance."

However, Microsoft makes £14 million per day from Windows client operating system liciences. This success is credited to their monopoly over operating systems. Therefore, £1.5 million per day is a small price to pay for a company that has a monopoly that will earn then £14 million. ^[4]

During this trial Microsoft recruited Detlef Eckert, who was working on information technology policy in the European Commission. The official line was that Eckert would help Microsoft develop better computer security.

The president of The Computer and Communication Industry Association, Ed Black visited Eckert put forward their concerns of Microsoft’s misconduct. The Association have been lobbying the European Commission to impose an anti trust ruling on Microsft. Black reports Eckert as saying:

“he was not within the competition directorate but he was probably in the directorate most closely involved in this case. ^[5]

Despite the European Commissions assurances that Eckert signed an agreement to fully respect with the conflict of interest rules and refrain from revealing confidential Commission information to Microsoft his involvement will surely be of some political use to the company.

Microsoft have also been greatly involved with the Campaign for Creativity. Microsoft have been concerned with patent rights and have used the campaign to represent their concerns in Europe. The Campaign was replaced by the Innovation and Creativity Group in 2005. Although they would not reveal where their funding came from there has been strong speculation that Microsoft gave significant finacial supoort.

People In Europe

Gordon McKenzie

Notes

1. ^Markham, G (2005) Microsoft Fine Could Be a Price Worth PayingThe Scotsman 27th December (accessed 28/03/07)
2. ^Markham, G (2005) Microsoft Fine Could Be a Price Worth PayingThe Scotsman 27th December (accessed 28/03/07)
3. ^ Markham, G (2005) Microsoft Fine Could Be a Price Worth PayingThe Scotsman 27th December (accessed 28/03/07)
4. ^ Markham, G (2005) Microsoft Fine Could Be a PriceWorth PayingThe Scotsman 27th December (accessed 28/03/07)
5. ^BBC News (2002) Anger As Microsoft Hires EU OfficialBBC News 29th Novemeber (accessed 24/03/07)