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Software giant balks at penalties

The European Union appears set to keep its hard-line stance against Microsoft’s allegedly anticompetitive tactics, and it is insisting on imposing a €899 million ($1.36 billion USD) fine on the company to keep its future actions in line.

Microsoft’s lawyers disagree, however, and entered a variety of arguments last May that the fine is too high, and was entered based upon “manifest errors” in the EU’s process. With copies of the arguments released publicly earlier this week (PDF), its demands to annul the fine are now available for perusal worldwide:

  • The EU “erred” in its decision to subject Microsoft to regular, periodic fines while the company released copies of its interoperability specifications, due to the fact that Microsoft’s pricing for the documentations was not in line with the EU’s definition of “reasonable,” – the EU never explicitly stated what it considered a “reasonable” price to be.
  • Further, licensing rates for information on its proprietary protocols – despite not passing the EU’s benchmark of reasonability – were more than 30 percent lower what industry experts PriceWaterhouseCoopers determined to be a fair price for “comparable technology.” (Ars Technica questioned this finding early last year, noting that in many cases ‘comparable technology’ was open source, and therefore free.)
  • Microsoft should not have been subjected to a “heightened patentability test,” where the innovation of its trade secrets was placed under scrutiny in order for the EU to decide whether or not Microsoft should have charged royalties for the use of its trade secrets.
  • The EU based some its assessment reports on documents obtained that courts later determined to be “unlawful.”
  • Microsoft was denied its “right” to be heard due to the EU’s failing to give Microsoft the opportunity to speak up after the period for which it was fined, preventing the company from “commenting on all relevant aspects of the case.”
  • And, simply, the fines imposed are “excessive and disproportionate,” particularly due to the fact that the EU chose to challenge its licensing practices.

Additionally, Microsoft previously appealed the fine to Europe’s Court of First Instance last May – however little has developed in the appeal since its filing.

The company’s trouble began in 2004 when the EU demanded Microsoft provide competitors the ability to connect to software running under its Windows platform (applications like Exchange and Active Directory). Third-party attempts to connect to Microsoft technologies have, typically, been written by reverse engineering the company’s communications protocols.

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RE: Funny
By Donkeyshins on 7/9/2008 7:43:23 PM , Rating: 2
You get stopped for speeding, doing 50 in a 30 zone and you get a fine. Afterwards you get pulled over a other couple of times for doing 40 in the same zone afterwards you have to come for a judge and he takes away your license (read the 1.4B fine) and you start arguing yeah but 40 is a real safe speed there this is bogus (read MS dint wane comply) do you find it strange that in the end a judge gives suds a penalty because you wont wane hear to reason ?

Actually, this is incorrect. The proper analogy would be:

You get stopped for speeding, doing 50MPH in an unmarked zone and you get a fine. After slowing down to 40MPH and asking the officer if this is slow enough, you get a warning, but no indication of the proper speed. You slow down to 30MPH and get another warning, but still no indication of the proper speed. You slow down to 20MPH, cars passing you on either side, and are hit with a 1.4B fine...while still not being told what the speed limit is.

I have seen a intervieuw whit Neelie Kroes the EU Competition Commissioner, in that interview she was saying that in her hole life she never came a crosses a company, that tried to stall, wiggle, BS its way out of complying whit the rules.

Yes, and Neelie Kroes is so impartial. Let's see, she's on the board for Lucent Technologies, which is a subsidiary of Alcatel-Lucent. Who is A-L suing again for infringement on MP3/MPEG licensing again (appealing a ruling which was thrown out of court)? Microsoft, who licensed the technology from Fraunhofer (which co-developed the technology with Bell Labs - Lucent's 'parent').

Why hasn't Neelie recused herself from the EU v. Microsoft case again? Makes one think...

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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