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Member of EU Parliament asks if Microsoft should be excluded from public procurement
Thursday, April 10 2008 @ 06:12 AM EDT

A member of the EU Parliament, Heidi Rühle, representative of the Green Party, has presented a question regarding whether or not Microsoft should be considered as having failed to fulfill the conditions to participate in public procurement procedures in Europe, as laid out in Article 93(b) and (c) of Financial Regulation. Here's her web page, in German, telling about it. One computer translation of one paragraph:
Here the question arises whether Microsoft can be excluded in the future from all advertisements of public jobs - no matter, whether it concerns new software for the public library of a town or the mechanism of a database for a federal authority.

Here's Heise's coverage in German, and happily for us in the US, here's the form [PDF] in English. Heise says the EU Commission has six weeks to respond in writing to such a question from a member of Parliament.

Of course, if the EU Commission wants to find a way to avoid such a penalty, no doubt it can do so. We saw how creative rule-bending/creating can be in the ISO. But the very fact that this question is being placed on the table is remarkable in itself, don't you think? Something significant has shifted in Microsoft's universe. And if they are afraid to make such a move, due to the ubiquity of Microsoft software and their dependence upon it, might that alone not inspire some deep thoughts about the wisdom of doing something about that vulnerability?

Here's the text of the question:

*********************************

TEXT:

On march 2004, the Commission adopted a decision declaring that Microsoft had seriously violated EU competition rules by abusing the dominant position in the software market, causing a huge damage both on competitors and consumers. On 17 September 2007, the Court of First Instance (CFI) rejected Microsoft's appeal (Case T-201/04). Microsoft has not appealed the CFI ruling, which can be deemed to have the force of res judicata. Following the 17 September 2007 judgment, the European Commission imposed on 27 February 2008 a substantial fine (899 million euros) on Microsoft for its non-compliance up until 22 October 2007 with its obligations under the Commission's March 2004 Decision to provide interoperability information on reasonable terms.

While Microsoft's behaviour had negative effects on millions of offices in companies and governments around the world, this fine for flouting the European competition law represents the highest amount ever imposed in fifty years of EC Competition law for abuse of dominant position. Furthermore, this fine follows a previous one of 280.5 million euros that was imposed in July 2006 essentially for the same reasons.

Pursuant to article 93 (b) & (c) of the Financial Regulation, which implements article 45 (2)(c) & (d) of Directive 2004/18/EC on public procurement, candidates or tenderers shall be excluded from participation in procurement procedures if: (b) they have been convicted of an offence concerning their professional conduct by a judgment which has the force of res judicata; (c) they have been guilty of grave professional misconduct proven by any means which the contracting authority can justify;

Considering that Microsoft continued to abuse its powerful market position after the Commission's March 2004 decision requiring it to change its practices, and given the fact that it is already the third time in four years that the Commission had to impose fines or penalty payment for non-compliance with a Commission decision, and bearing in mind that the 17 September 2007 CFI judgment has the force of res judicata, does the Commission consider that Article 93 (b) and (c) of Financial Regulation, read in conjunction with article 45(2) of Directive 2004/18/EC, could be applied to Microsoft in this particular case and with regard to any ongoing or future public procurement procedure? If it is the case, could we therefore consider that Microsoft does not fulfill the conditions to participate in such public procurement procedure?

Here's how Article 93 reads:

Article 93

1. Candidates or tenderers shall be excluded from participation in a procurement procedure if:

(a) they are bankrupt or being wound up, are having their affairs administered by the courts, have entered into an arrangement with creditors, have suspended business activities, are the subject of proceedings concerning those matters, or are in any analogous situation arising from a similar procedure provided for in national legislation or regulations;

(b) they have been convicted of an offence concerning their professional conduct by a judgment which has the force of res judicata;

(c) they have been guilty of grave professional misconduct proven by any means which the contracting authority can justify;

(d) they have not fulfilled obligations relating to the payment of social security contributions or the payment of taxes in accordance with the legal provisions of the country in which they are established or with those of the country of the contracting authority or those of the country where the contract is to be performed;

(e) they have been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organisation or any other illegal activity detrimental to the Communities' financial interests;

(f) following another procurement procedure or grant award procedure financed by the Community budget, they have been declared to be in serious breach of contract for failure to comply with their contractual obligations.

2. Candidates or tenderers must certify that they are not in one of the situations listed in paragraph 1.

Articles 95 and 96 are interesting too, as they say any entity that is being banned will first have an opportunity to present its side of things, and the ban lasts for five years:

Article 95

Each institution shall establish a central database containing details of candidates and tenderers who are in one of the situations described in Articles 93 and 94. The sole purpose of the database shall be to ensure, in compliance with Community rules on the processing of personal data, the correct application of Articles 93 and 94. Each institution shall have access to the databases of the other institutions.

Article 96

Administrative or financial penalties may be imposed by the contracting authority on candidates or tenderers who are in one of the cases of exclusion provided for in Articles 93 and 94, after they have been given the opportunity to present their observations.

These penalties may consist:

(a) in the exclusion of the candidate or tenderer concerned from contracts and grants financed by the budget, for a maximum period of five years;

(b) in the payment of financial penalties by the contractor in the case referred to in Article 93(1)(f) and by the candidate or tenderer in the cases referred to in Article 94 where they are really serious and without exceeding the value of the contract in question.

The penalties imposed shall be in proportion to the importance of the contract and the seriousness of the misconduct.


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