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The Two New Investigations of Microsoft by the EU Commission - Updated 4Xs
Monday, January 14 2008 @ 02:09 PM EST

I thought it would be useful to put all the important information about the two new investigations of Microsoft by the EU Commission here. First, Opera's complaint to the EU Commission was deemed worth following through on. That is significant, indeed, but the ECIS complaint about Office is even bigger to FOSS, particularly with the Microsoft MSOOXML vote coming in February. One of the issues the EU Commission says it will be investigating is whether Office Open XML as implemented in Office is "sufficiently interoperable with competitors' products".

Heh heh. Maybe not.

You might find the proposed agreement [PDF] between Microsoft Greece and the Greek government that NO OOXML just publicized of interest. I would analyze it a bit differently, but it certainly shows a kind of bartering for business that no competitor could afford to match. (Note something similar in India.) Put that together with this study which the press release indicates shows an environment ripe for corruption of votes, and it raises in my mind questions about competition.

But on to the latest. First, here's the EU Commission press release and here's ECIS's statement [PDF]. It will be on this page shortly, I believe. Opera will no doubt have a statement too, and when it is released will be here.

Here's the meat of the EU Commission statement:

The European Commission has decided to initiate two formal antitrust investigations against Microsoft Corp concerning two separate categories of alleged infringements of EC Treaty rules on abuse of a dominant market position (Article 82). The first case where proceedings have been opened is in the field of interoperability in relation to a complaint by the European Committee for Interoperable Systems (ECIS). The second area where proceedings have been opened is in the field of tying of separate software products following inter alia a complaint by Opera. As regards interoperability, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies as regards interoperability disclosures. In the complaint by ECIS, Microsoft is alleged to have illegally refused to disclose interoperability information across a broad range of products, including information related to its Office suite, a number of its server products, and also in relation to the so called .NET Framework. The Commission's examination will therefore focus on all these areas, including the question whether Microsoft's new file format Office Open XML, as implemented in Office, is sufficiently interoperable with competitors' products.

As for the tying of separate software products, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies. In a complaint by Opera, a competing browser vendor, Microsoft is alleged to have engaged in illegal tying of its Internet Explorer product to its dominant Windows operating system. The complaint alleges that there is ongoing competitive harm from Microsoft's practices, in particular in view of new proprietary technologies that Microsoft has allegedly introduced in its browser that would reduce compatibility with open internet standards, and therefore hinder competition. In addition, allegations of tying of other separate software products by Microsoft, including desktop search and Windows Live have been brought to the Commission's attention. The Commission's investigation will therefore focus on allegations that a range of products have been unlawfully tied to sales of Microsoft's dominant operating system.

This initiation of proceedings does not imply that the Commission has proof of an infringement. It only signifies that the Commission will further investigate the case as a matter of priority.

ECIS's statement says this:

ECIS takes note of the European Commission announcement today opening two new investigations against Microsoft for abuse of its dominant position.

"It is regrettable that despite the judgment of September 2007, Microsoft continues to use its desktop monopolies to restrict competition. That's what the ECIS and Opera complaints are about," said Thomas Vinje, ECIS spokesman.

ECIS therefore welcomes the Commission's announcement as a necessary step towards ensuring Microsoft's compliance with competition rules in the areas mentioned in the ECIS complaint of February 2006 and the Opera complaint of December 2007. These include the refusal to disclose interoperability information for a range of products relating to the Office suite, email and collaboration software, and the .NET framework as well as Microsoft's illegal tying of its Internet Explorer product to its Windows monopoly.

I'm pretty sure this means they're addressing the SharePoint strategy that Dana Blankenhorn explained last summer and that Matt Asay has been writing warning messages about repeatedly. Regarding the Opera complaint, as a refresher, here's an interview with Thomas Vinje regarding ECIS support for Opera. FSFE also announced its support. And a group interview with Opera's CEO, CTO and general counsel.

Update: Andy Updegrove has a reaction, looking particularly at the standards issue and MSOOXML:

The investigations will also look into whether Microsoft has failed to adequately open OOXML, or to take adequate measures to ensure that Office is "sufficiently interoperable" with competing products. This would seem to indicate that Microsoft's strategy of offering OOXML to Ecma, and then ISO/IEC JTC1, may fail to achieve its objective, whether or not OOXML is finally approved as a global standard.

Why? Perhaps because of Microsoft's heavy-handed actions during the review period that ended – unsuccessfully – on September 2. And perhaps also because Microsoft has refused to implement ODF, consigning the marketplace to a web of imperfect converters and translators that are likely to always result in more complex Office documents being slightly less than perfect when converted into other word processing suites.

Update 2: Here's something interesting, an interview with Jonathan Todd, spokesman for the EU Commission, who indicates it wasn't only Opera who has complained about tying:

Jonathan TODD: The investigation concerning tying of products in with the Microsoft Operating System. It is partly based on a complaint by a company called Opera, and concerns the tying in the Internet Explorer, but we have also had complaints about the tying in other softwares, and essentially we will be looking whether this tying in constitutes an abuse of Microsoft dominant position on the operating system software market and in particular we are gonna be taking in account the principles laid down in the Commission's March 2004 decision which were confirmed by the Court of First Instance last Autumn.

Update 3: We have a Microsoft statement now from BusinessWeek:

"Microsoft should be concerned because this case addresses core aspects of its business model and the preservation of its core monopolies," says Thomas Vinje, a partner at law firm Clifford Chance in Brussels, Belgium, who represents a coalition of tech companies that filed one of the two new complaints. "The case has the potential to transform the software industry and give consumers a real choice in desktop operating systems and programs."

In a statement, Microsoft said it plans to cooperate with the European Commission's investigation and provide it with the information it requests. "We are committed to ensuring that Microsoft is in full compliance with European law," the company said.

Update 4: The ECIS and Opera cases have case numbers now:

COMP/39.294, ECIS complaint
COMP/39.530, Opera complaint

When the Commission adds official announcements, it will reference those case number files on that page. Here's the ECIS info currently. And here's Opera's.


The Two New Investigations of Microsoft by the EU Commission - Updated 4Xs | 172 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: lordshipmayhem on Monday, January 14 2008 @ 02:13 PM EST
Please put the nature of the error in the Title.

[ Reply to This | # ]

Off Topic here
Authored by: lordshipmayhem on Monday, January 14 2008 @ 02:14 PM EST
Please make all links clickable!!

[ Reply to This | # ]

News Picks discussions here
Authored by: lordshipmayhem on Monday, January 14 2008 @ 02:16 PM EST

[ Reply to This | # ]

SharePoint strategy- Is there a special area on Groklaw to explain Sharepoint's monopoly goals?
Authored by: Anonymous on Monday, January 14 2008 @ 02:59 PM EST
SharePoint strategy - Is there a bullet list or a section of Groklaw that is
focused on "Share Point" and it's built-in monopoly goals (and will
the SAMBA win, even address working with SharePoint in any way, if possible)?

Again, Microsoft is the dog, everyone else is the tail, by the time that the end
of the tail moves, the begining of the tail has already headed back in another

Sharepoint. Silverlight. MSOOXML. etc...
same song, different verse.
It will be years and billions of profit for Microsoft before anything gets ruled
on. Oh - Microsoft knows how to play that game now too.
Dog, and tail... it's simple.

[ Reply to This | # ]

something I noticed in the Greek aggreement PDF
Authored by: jesse on Monday, January 14 2008 @ 04:34 PM EST

Something I noticed in the Greek agreement...

Microsoft shall support the participation of a doctoral student within the framework of the Microsoft External Research...

Note the phrasing "of a doctoral student" (and student is singular). The associated "no ooxml" publication says "... grants for top doctoral students." Which is not quite what the agreement says. Maybe they misread?

This means they only have to support ONE STUDENT.

[ Reply to This | # ]

Wow! Uncomfortably broad remit from a MS point of view
Authored by: SilverWave on Monday, January 14 2008 @ 05:25 PM EST
"The Commission's investigation will therefore focus on allegations that a
range of products have been unlawfully tied to sales of Microsoft's dominant
operating system."

But the crucal part would be any proposed remedy...

Forcing MS to offer a "reduced media XP" was not a viable solution to
the bundling of media player by any means.

Hopefully the EU will learn from their mistake.

2nd point: This may take 5 years to work through the system(optimistically) so
how relevant it will be by then will be debatable :(

Still looking on the bright side the samba decision was a great win and very
unexpected... so there is always hope :)

Software Patents give Hardware Patents a bad name.

If the Pharmaceutical industry does not want to be included in the backlash...
arrange for a separation.

[ Reply to This | # ]

Authored by: Alan(UK) on Monday, January 14 2008 @ 05:27 PM EST
A quick look at the agreement with the Greek government seems to indicate that
the Greeks in general and the Greek government in particular have been found to
be less than diligent in ensuring that all their Microsoft software is properly
licenced - this agreement seems to say that Microsoft will do certain helpful
things in exchange for the Greek government getting the licence fees paid.

Microsoft is nailing up its own coffin from the inside.

[ Reply to This | # ]

Authored by: Anonymous on Monday, January 14 2008 @ 05:34 PM EST
With the precedent as a solid foundation, I'm seeing final victory!
MS is sooo out of touch with reality. Bye bye Bill, have a quiet retirement,
watching your empire decline to irrelevancy.
Tonight is a good time to celebrate with bubbles.

Happy Ubuntu user

[ Reply to This | # ]

The Two New Investigations of Microsoft by the EU Commission - Updated 2Xs
Authored by: Anonymous on Monday, January 14 2008 @ 05:36 PM EST
In return for the investigation, will the EU be forcing Opera to publish its
source code?

[ Reply to This | # ]

Illegal Linkages
Authored by: sproggit on Tuesday, January 15 2008 @ 01:48 AM EST
So now we have a statement from the EU that explains they are willing to look at a broader spectrum of illegally tied software (in this instance, from Microsoft).

So perhaps we could either point the Commission to work already done in this arena (does any reader know of such) or as an alternative we could consider forming a list here.

If the latter, here's a start... Some of these examples do go beyond the core limits and consider other bundling practices such as subsidies that MS pay out to other companies. I suggest we think about this purely from the fact that the moment Microsoft start to subsidise one company over any other, they start to distort the marketplace to their design, which has to be a bit of a dodgy practice when you think about it.

One of the most blatant examples. When Microsoft were ordered to do something about this, their response was to move blocks of browser code into dll files that were used elsewhere in the OS. Very underhand.

Accelerated Graphics
There was a time when Microsoft supported OpenGL alone. Then we had a short period in which they introduced DirectX and both were equally treated by Microsoft. Next, over time, Microsoft steadily dropped away their support for the OpenGL codebase in favour of DirectX. As a result of that we witnessed the way that a monopoly on software can drive a hardware market (hardware vendors of graphics cards). Today, OpenGL is all but extinguished. Only one or two gaming companies still use it. (A shame, since if they did, more games could easily be ported to Linux...)

Office Suites
There are also plenty examples of the ways that Microsoft have changed file formats in an attempt to kill competing office products. Back in the pre-Windows days (and I'll concede this is almost certainly too out-dated to use) the mantra at Microsoft was,

"DOS isn't done until 1-2-3 won't run".

In case you're not familiar with it, 1-2-3 was a spreadsheet program from Lotus, a company more recently purchased by IBM.

Network Monitoring Tools
Back in the days when portable computers were affectionately known as 'luggables' and weighed as much as a sack of coal, a company produced a wonderful networking product called LANalyzer. IIRC this software was eventually purchased by Novell. Anyway, Microsoft responded to this by offering their own "Network Monitor Tool" as part of the BackOffice suite, and therefore for free as a bundled piece of software.

As with so many other examples, when you think about it, a network diagnostics and deep packet inspection tool isn't really in the same software family as a server OS, a mail server, a database server, web server, etc.

There are a host of devices out there today such as WinModems and WinRAID cards that are only designed to work with Windows. I do appreciate that this is pushing the boat out a bit far, but Microsoft seem to have a track record of spending millions of dollars on 'partners' in their 'ecosystem' to only support the Microsoft operating systems. There are many examples of this happening today, including from well established hardware companies, such as Creative and Adaptec.

You may have read an article recently that covers a statement from Michael Bay (who produced the 2007 movie Transformers among many others) in which he explained that MS had paid Universal Studios $100 Million dollars in a deal that called for Universal to only use the HD-DVD format for it's movies.

There were a couple of theories behind this. One was that MS wanted to ensure a good selection of DVDs would play on their X-Box. Another was that they were competing against Sony (leader of the rival BluRay format) in the console space and this was leverage. A third was that MS wanted to propagate the conflicting standards war long enough to get their own streaming-movie-download business off the ground.

I'd submit it doesn't matter. What's a software company like Microsoft doing paying Universal $100 Million to swing that company's judgement on media formats?

I'm sure there are other examples of software monopolies. Maybe we could make a list.

[ Reply to This | # ]

The Two New Investigations of Microsoft by the EU Commission - Updated 4Xs
Authored by: Anonymous on Wednesday, January 16 2008 @ 08:39 AM EST
I hope they stick with this and never let up. microsoft has to learn they can't
buy all the governments of the world and realize some people don't want to use
their products.

microsoft is destroying an industry by monopolizing and forcing people to use
their products so they can read THEIR information - this has to stop and I hope
they stick with it and not be bought.

[ Reply to This | # ]

"preservation of its core monopolies" hahaha
Authored by: Anonymous on Wednesday, January 16 2008 @ 01:32 PM EST
preservation of its core monopolies
hahaha Unfortunately that what "BIG" business is all about in the U.S.A. and elsewhere .... MONOPOLY. Everyone, Jobs, Gates et al. are terrified about MAKING MONEY THE OLD FASHIONED WAY; by providing a good service and/or product. Instead "BIG" business makes it's profit off the backs of middle and low income families by forcing them to use one MONOPOLY or another. MONOPOLIES are enabled because the rich elite can buy whatever laws and regulations they need to stop competition. And when that MONOPOLY fails to show a profit, the "BIG" business instead makes it's profit off the backs of middle and low income families via various secret tax giveaways. Read the Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) if you don't get it.
How does a strong and growing economy lend itself to job uncertainty, debt, bankruptcy, and economic fear for a vast number of Americans? Free Lunch provides answers to this great economic mystery of our time, revealing how today’s government policies and spending reach deep into the wallets of the many for the benefit of the wealthy few. Johnston cuts through the official version of events and shows how, under the guise of deregulation, a whole new set of regulations quietly went into effect—regulations that thwart competition, depress wages, and reward misconduct. From how George W. Bush got rich off a tax increase to a $100 million taxpayer gift to Warren Buffett, Johnston puts a face on all of the dirty little tricks that business and government pull. A lot of people appear to be getting free lunches—but of course there’s no such thing as a free lunch, and someone (you, the taxpayer) is picking up the bill. Johnston’s many revelations include: • How we ended up with the most expensive yet inefficient health-care system in the world • How homeowners’ title insurance became a costly, deceitful, yet almost invisible oligopoly • How our government gives hidden subsidies for posh golf courses • How Paris Hilton’s grandfather schemed to retake the family fortune from a charity for poor children • How the Yankees and Mets owners will collect more than $1.3 billion in public funds In these instances and many more, Free Lunch shows how the lobbyists and lawyers representing the most powerful 0.1 percent of Americans manipulated our government at the expense of the other 99.9 percent. With his extraordinary reporting, vivid stories, and sharp analysis, Johnston reveals the forces that shape our everyday economic lives—and shows us how we can finally make things better.

[ Reply to This | # ]

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