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Microsoft foot-dragging irks EU, U.S.

For the first time in 12 years, Microsoft is in trouble on both sides of the Atlantic for the same reason at the same time –failing to promptly and fully share information needed to remedy its antitrust violations.
/ Source: Reuters

For the first time in 12 years, Microsoft is in trouble on both sides of the Atlantic for the same reason at the same time -- failing to promptly and fully share information needed to remedy its antitrust violations.

The European Commission has reacted to Microsoft’s foot-dragging with a threatened fine of up to 2 million euros ($2.46 million) daily. The U.S. Justice Department this week for the first time expressed similar frustration, and it will be up to a judge to decide if new action is necessary.

Microsoft’s general counsel, Brad Smith, said Wednesday that the software giant would offer licenses for some of its source codes in a bid to comply with antitrust requirements set by the European Commission.

That may appease the European Commission. However, recent statements from both the EU and the Justice Department show a common frustration.

“There’s a striking similarity between Microsoft’s efforts to evade compliance with the European decision and its failure to properly comply with the U.S. settlement,” said Thomas Vinje, a Brussels lawyer who represents Microsoft critics.

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Microsoft has said it does not want to provide so much information that it would unfairly surrender its intellectual property to other companies.

“The current issue with the U.S. program is not comparable to the concerns raised in Europe. We have a program here that is successfully operating with 26 licensees and a dozen products shipping,” Microsoft spokesman Jack Evans said by telephone from the company’s headquarters in Redmond, Washington.

The governments say the remedies are aimed at restoring competition that Microsoft destroyed through illegal actions. That competition, Brussels and Washington contend, will give consumers a broader choice and promote innovation.

Six years after a U.S. judge found Microsoft violated the Sherman Act against monopoly abuse, the Justice Department complained to a judge this week that the software giant had provided inaccurate information and failed to meet deadlines.

Two years after the European Commission found Microsoft had violated the 25-member bloc’s antitrust laws, the EU regulator told Microsoft late last year that documentation it had provided was “fundamentally flawed.”

“The Justice Department and the Commission’s competition department have regular contact on this case,” said Commission spokesman Jonathan Todd.

Similar remedies
In the United States, Microsoft is supposed to license its software to help rivals’ servers work smoothly with its Windows operating system, because it competed unfairly in the 1990s.

In Europe, the Commission has ordered Microsoft to license its protocols -- rules of the road -- to help rivals’ server software work with other servers and with its Windows operating system, because it competed unfairly in the late 1990s.

In each case, competitors need instruction to use the software.

But in a filing to the U.S. District Court in Washington, the Justice Department and 10 states said Microsoft was dragging its feet and its last filing had “not detailed the seriousness of the current situation.”

The company had fallen significantly behind and needed to “dramatically increase the resources devoted to responding to technical documentation issues.”

The U.S. filing said Microsoft had acknowledged it provided inaccurate information and on some occasions had been unable to provide accurate information.

The European Commission quoted a trustee nominated by Microsoft as calling the company’s approach to documentation “fundamentally flawed in its conception and ... explanation and detail.”

Throughout the fight, critics and governments have said that delaying the remedies perpetuates Microsoft’s advantage while changes in technology and competition erode their relevance.

Wednesday was meant to be the deadline for the company to respond to the Commission’s threatened fine, but once again Microsoft has gained time with a delay to Feb. 15.

The last time the United States and Europe worked together on the case was in 1994, when they reached a joint agreement with Microsoft over licensing policies.

At one time, Microsoft also faced lawsuits from companies that complained its unfair practices had damaged their business, some following on cases brought by governments.

Microsoft settled those cases with AOL-Time Warner, Sun Microsystems, InterTrust Technologies, Novell, the Computer & Communications Industry Association and RealNetworks between 2003 and 2005 for about $4.5 billion.

The main legal actions left involve 30 governments -- the 25-nation EU and three other states linked to it in the European Economic Area, the United States and South Korea.