Europe: Microsoft still out of compliance

By Dawn Kawamoto
Staff Writer, CNET News.com

Published: March 10, 2006, 9:46 AM PST

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After reviewing the latest documents submitted by Microsoft in its antitrust case, the European Commission announced Friday that it sent a letter to the software giant reaffirming its view that the company is out of compliance with its antitrust order.

The letter is the latest blow to the software maker as it heads toward its oral hearing in the case. After the hearing, scheduled for March 30 and 31, the Commission will make a final decision on whether to impose a daily fine of $2.36 million (2 million euros), which would remain in force until Microsoft comes into compliance with the Commission's historic antitrust order.

The Commission, which in December issued a "statement of objections" that said Microsoft had not complied with its 2004 order, had its monitoring trustee, Neil Barrett, review additional information Microsoft supplied after the "statement of objections" was released. The order calls for Microsoft to provide accurate and adequate protocol information to allow rivals' technology to interoperate with Windows PCs and servers.

"The monitoring trustee notes that although it was improved slightly, 'nothing substantial was added to the technical documentation,' compared to the previous version," according to a statement by the Commission. "The material continues to be incomplete, inaccurate and unusable."

The Commission also had Taeus Europe, a European subsidiary of intellectual property valuation and reverse engineering firm Taeus International, review the Microsoft documents.

Taeus' report describes various parts of the documentation as "entirely inadequate" and "self-contradictory," according to the Commission statement. "Taeus concludes that Microsoft's documentation was written 'primarily to maximize volume (page count) while minimizing useful information.'"

Microsoft, however, contends it has gone above and beyond industry requirements for documentation.

"Microsoft has submitted...a large volume of expert testimony that finds in the clearest of terms that Microsoft's documentation reaches or exceeds every industry standard for the documentation of such technologies," Microsoft said in a statement. "The fact that the Commission has sought to review the evidence after issuing its December 'statement of objections' shows quite clearly that the "statement'...is fundamentally flawed and should be withdrawn."

Should the Commission issue a final decision against Microsoft, the software giant would face a retroactive fine of $2.36 million a day for the period between Dec. 15 and the date the final decision is issued. The Commission may then take additional steps to extend the daily fine until Microsoft complies with the order.

The Commission's letter is just the latest action it has taken in the closely watched antitrust case.

In a rare move, the Commission on Friday also published information detailing the role of its monitoring trustee.

European antitrust regulators took this unusual step after Microsoft last week asked the U.S. courts to intervene in the case. Microsoft is seeking to gain access to documents and communications between the companies and the Commission's trustee, Barrett.

As part of the Commission's decision to define the trustee's role, the document outlines recommended actions.

"It's not the kind of normal thing we do, but we have done so because Microsoft is alleging the trustee acted in an inappropriate manner in terms of contacting other companies," said Jonathan Todd, a spokesman for the Commission. "We wanted to make crystal clear that he is obligated to be proactive."

In defense of its trustee, the Commission noted in its statement: "The trustee must be in a position to gather views on compliance issues through contacts not only with Microsoft engineers but also with potential beneficiaries of the remedy...(they) are therefore part of his obligations under the trustee decision and not in any way a form of inappropriate collusion as has been suggested."

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