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EU cautious on Microsoft source code offer

Microsoft’s surprise offer to show rivals its source code may prove wide of the mark and fail to avert a daily fine of $2.5 million, the European Union’s antitrust chief said Thursday.
/ Source: Reuters

Microsoft’s surprise offer to show rivals its source code — its software blueprint — may prove wide of the mark to avoid a daily 2 million euro ($2.5 million) fine, the European Union’s antitrust chief said on Thursday.

Competition Commissioner Neelie Kroes said what users needed was workable instructions which would allow competitors to develop server software for functions such as managing printers that works with Windows as well as Microsoft’s programs do. (MSNBC.com is a Microsoft - NBC joint venture.)

The EU ruled in 2004 that U.S. giant must must share the instructions to correct unfair competition that had crippled competitors.

Kroes told Reuters she had little to go on regarding Microsoft’s announcement it will open its source code, since the company had given her only a letter and a press release rather than a detailed response to Brussels’ formal complaints.

“When we have full details I will come back,” she said, adding the European Commission, the EU’s executive arm, had never sought source code, which Microsoft describes as the DNA of its Windows operating system.

Microsoft promised in a statement on Thursday that it would give programmers “a full set of detailed technical specifications which provide a roadmap to the technology, as well as technical support from Microsoft engineers”.

The company’s chief counsel, Brad Smith, told a news conference on Wednesday: “The Windows source code is the ultimate documentation of Windows server technologies.
“With this step our goal is to resolve all questions about the sufficiency of our technical documentation.”

But Kroes took a different view.

“Normally speaking, the source code is not the ultimate documentation of anything, which is precisely the reason why programmers are required to provide comprehensive documentation to go along with their source code,” she said in a telephone interview from the World Economic Forum at Davos, Switzerland.

“It was a surprise that they decided to disclose the source code,” she said.

Kroes said the Commission is awaiting Microsoft’s formal response to charges made public last month that the company is not meeting requirements set out by the Commission.

That response is due by Feb. 15 and Microsoft also has the right to a hearing, before the Commission decides whether to impose a fine.

Smith said Microsoft has already provided 12,000 pages of documentation along with a promise to provide 500 hours of free support for those who pay to license its source code.

But EU competition spokesman Jonathan Todd said it was too soon to judge whether the offer was adequate.

“They can give us half a million pages but if they are not the right pages they do not comply with the remedy,” he said.

The Commission has not accepted Microsoft’s arguments that it has the right to charge rivals for access to protocols -- the rules of the road that allow servers to connect to desktop machines -- although it is studying the proposal.

The EU could fine Microsoft if it determines that the company is proposing to charge for protocols which have no inherent value.

Smith argued the company can negotiate prices as it sees fit.

“Prices typically are arrived at by companies talking together,” he said, adding that the Commission’s ruling “effectively creates a market for our communications protocols.”

Todd labelled that statement misleading.

“We are not dealing with carpet sellers in a market where customers have a choice,” he told reporters. “We are dealing with a company which has a dominant market position and a company that has been found by the Commission to have been abusing that position.”