<meta http-equiv="Content-Type" content="text/plain; charset=utf-8">

#title: EU vs MS Antitrust Procedings: Exclusion of Free Software from
Patented Standards Deemed Reasonable

#descr: In its anti-trust procedings against Microsoft, the European
Commission has found that Microsoft is trying to extend its desktop
monopoly into the market for %(tp|workgroup servers|file, print, mail
and web servers) by keeping secret the communications protocols that
enable its desktop and server products to talk to each other.
%(q:Without such information, alternative server software would be
denied a level playing field, as it would be artificially deprived of
the opportunity to compete with Microsoft's products on technical
merits alone,) the Commission warned in 2001. Yet, the Commission has
stopped short of demanding that Microsoft make its protocols freely
available.  According to an article in the Economist, Microsoft will
only be required to license its server-communications protocols to
rivals on a %(q:reasonable and non-discriminatory) basis, which means
e.g. that free/opensource software projects such as Samba can be
excluded, and a look at Microsoft's recently published aggressive
licensing program shows that indeed they are. Another arm of the
Commission is fighting for the right of Microsoft and other companies
to forbid interoperation with any patented standard which they chose
to impose by their market power.  Bolkestein's Industrial Property
Unit has been urging the Council members to remove Art 6a of the
European Parliament's Software Patent Directive Proposal.  Art 6a
demands that the use of a patented technique for mere interoperation
purposes should always be royalty-free.

#sWW: Economist report on CEC vs MS Antitrust procedings

#WWf: According to this report, the European Commission demands that
Microsoft protocols should be available under %(q:Reasonable and
Non-Discriminatory) licensing conditions, which means that they should
not be available for free/opensource software projects such as Samba.

#tWW: In its anti-trust procedings against Microsoft, the European
Commission has found that Microsoft is trying to extend its desktop
monopoly into the market for %(tp|workgroup servers|file, print, mail
and web servers) by keeping secret the communications protocols that
enable its desktop and server products to talk to each other.
%(q:Without such information, alternative server software would be
denied a level playing field, as it would be artificially deprived of
the opportunity to compete with Microsoft's products on technical
merits alone,) the Commission warned in 2001.

#atW: Yet, the Commission has stopped short of demanding that Microsoft make
its protocols freely available.  According to an article in the
Economist, Microsoft will only be required to license its
server-communications protocols to rivals on a %(q:reasonable and
non-discriminatory) basis, which means e.g. that free/opensource
software projects such as Samba can be excluded, and a look at
Microsoft's recently published aggressive licensing program shows that
indeed they are.

#frW: Another arm of the Commission is fighting for the right of Microsoft
and other companies to forbid interoperation with any patented
standard which they chose to impose by their market power. 
Bolkestein's Industrial Property Unit has been urging the Council
members to remove Art 6a of the European Parliament's Software Patent
Directive Proposal.  Art 6a demands that the use of a patented
technique for mere interoperation purposes should always be
royalty-free.)

#wee: The Economist this week has a long piece on the state of play between
Microsoft and the antitrust authorities, particularly in Europe.

#seg: Even in this very high profile anti-trust case, the Commission seems
not to be prepared to go further than requiring %(q:reasonable and
non-discriminary) (= uniform fee) licensing -- there seems to be no
suggestion of demanding royalty-free open publication of standards,
even though for Workgroup services, one of the major competitiors must
be Samba.

#Wog: On the other hand, Article 6a of the %(ep:Parliament's version of the
software patent directive) says that RAND is not good enough -- it
must be possible to compete without the burden of license-collecting,
e.g. on the basis of free/opensource software.

#ror: Extracts from the article:

#eWi: The commission's case against Microsoft is detailed in a confidential
document, known as the %(q:Statement of Objections), the most recent
version of which has been seen by The Economist. The document, drawn
up last August, builds on two previous statements (in 2000 and 2001)
which accused Microsoft of behaving anti-competitively in two areas.

#tcu: First, the commission alleged that Microsoft was trying to extend its
desktop monopoly into the market for workgroup servers (file, print,
mail and web servers) by keeping secret the communications protocols
that enable its desktop and server products to talk to each other.
%(q:Without such information, alternative server software would be
denied a level playing field, as it would be artificially deprived of
the opportunity to compete with Microsoft's products on technical
merits alone,) the commission warned in 2001.

#yWa: Second, Microsoft was accused of trying to extend its monopoly into
the media-player market, by incorporating its Windows Media Player
(WMP) software into Windows, so ensuring that it would be installed on
over 95% of new PCs. Rival products, the commission observed, did not
have this advantage; nor could WMP be uninstalled. %(q:The result is a
weakening of effective competition in the market...and less
innovation,) it concluded.

#lpi: the latest supporting evidence

#cWw: Accordingly, a number of remedies are proposed. The simplest is a fine
that reflects the %(q:gravity and duration) of the infringement.
European antitrust law allows violators to be fined as much as 10% of
their annual worldwide revenues -- a fine of more than $3 billion in
Microsoft's case. In addition, Microsoft would be required to license
its server-communications protocols to rivals on a %(q:reasonable and
non-discriminatory) basis. This is consistent with the settlement that
Microsoft reached in America, which also requires it to license some
of its protocols.

#awe: Following a review of the progress of the American settlement, on
January 23rd Microsoft agreed to simplify and extend its licensing
programme to encourage wider use. Critics had complained that its
previous licensing terms were so complicated that only 11 companies
had signed up for them. After the announcement, Judge Colleen
Kollar-Kotelly, who is overseeing the American settlement, declared
herself satisfied with the company's efforts to comply with the
settlement.

#gnr: devising remedies for Windows Media Player is harder

#rlW: Short of a break-up, however, there is no effective antidote to tying.
Forcing Microsoft to produce a Europe-specific version of Windows
without WMP (or any other specific features) would, in effect, impose
an inferior product on European consumers. It is difficult to argue
that this would be in their interests. And it would, in any case,
probably result in a grey market as the full version of Windows was
imported from elsewhere. There are also problems with the must-carry
approach: which other media players would be included? Presumably
those with the greatest market share. But that would itself be
anti-competitive, since it would entrench the positions of the
existing players. Furthermore, WMP would still be ubiquitous.

#ese: Both sides may well want to settle before enlargement in May

#irf: Reading between the lines, it is just possible to discern the kind of
settlement that might now be under discussion: a far wider licensing
programme, perhaps one that confers special privileges on companies
(such as RealNetworks and Apple) that develop software which competes
with parts of Windows. But the devil would be in the details: such a
deal might prove to be no more than a grand gesture, allowing the
commission to declare victory and then retreat. Microsoft has, after
all, shown itself to be a master at running rings around regulators.
That said, the commission's Statement of Objections pre-emptively
disallows a number of ways in which Microsoft could evade the proposed
tying remedies --- which suggests that the commission has learned from
past regulatory experiences.

#ian: But MS may fight it all the way; and the whole issue may happen again,
if MS integrates search technology, threatening Google

#eWh: Initially, the MSN search toolbar is a free optional download, as
Microsoft's web browser and media player once were. The next step,
inevitably, will be to integrate such search functions into Windows,
on the grounds that it constitutes a core technology that should be
part of the operating system. In his keynote speech at last November's
Comdex show in Las Vegas, Mr Gates demonstrated a prototype technology
called %(q:Stuff I've Seen) which does just that. It allows computer
users to search for context-specific words in e-mails and in recently
visited web pages, as well as in documents on their computers.

#WWe: eventually MS might do best if it handed over some of its Windows
protocols to an independent standards body... but that still seems
unimaginable at the moment

# Local Variables: ;
# coding: utf-8 ;
# srcfile: /usr/share/emacs/site-lisp/phm/sys/mlht.el ;
# mailto: mlhtimport@ffii.org ;
# login: phm ;
# passwd: YYYYY ;
# feature: swpatdir ;
# dok: cecms040202 ;
# txtlang: en ;
# multlin: t ;
# End: ;