Wednesday, April 26, 2006

Microsoft decries 'free ride'

A Microsoft lawyer says that EU antirust enforcers are unfairly striping the firm’s intellectual property to rivals.

Microsoft Corp. complained Wednesday that the European Commission had forced it to hand over trade secrets to rivals, effectively giving them a "free ride" on the work the software maker did to acquire new customers and develop new technologies.

But Microsoft's rivals said the company was trying to turn the case into a debate over intellectual property rights and skirt the commission's argument that Microsoft has abused its monopoly.

The European Commission's order for Microsoft Corp. to share its code so rivals' software can run smoothly with Windows took center stage Wednesday in the third day of the company's bid to have a landmark antitrust ruling against it overturned.

Microsoft lawyer Ian Forrester said the order had been an attempt "to handicap the (market) leader in perpetuity."

"The decision condemned a company for not saying yes to a company who requests a huge amount of secret technology for the future," he said.

"The Windows source code is copyright. It is valuable, the fruit of lots of effort," he said, adding that were it printed on paper, it would take up 12,650 pages.

Thomas Vinje, a lawyer for an industry group supporting the commission — the European Committee for Interoperable Systems, or ECIS — said Microsoft was blowing its patent rights out of proportion.

"Microsoft are trying to turn this into an intellectual property case when it's not," he said. "This is a case about abuse of a dominant position, about refusing to provide information to vendors."

Microsoft broke an informal agreement with EU advocates when it brought up the recent dispute over the company's compliance with the order to share its code_ earning them a stern reprimand from Judge Bo Vesterdorf, who told Forrester to stick to the issue at stake.

Forrester had claimed that Microsoft was being threatened with 2 million euros ($2.4 million) in daily fines, backdated to Dec. 15, for not creating "a new copyright work" derived from Windows' secret source code.

EU regulators had asked Microsoft to supply a "complete and accurate" support manual for developers to help them make compatible software.

Last December, they charged Microsoft with not obeying the order after an independent monitor branded Microsoft's 12,650-page technical manual as "unfit at this stage for its intended purpose."

The world's largest software maker says it has the right to guard its valuable intellectual property, and maintains that it has worked strenuously to comply with the 2004 EU ruling that told it to pay a record 497 million euro ($613 million) fine.

The ruling was handed down after a five-year investigation concluded that Microsoft had taken advantage of its dominant position to damage rivals who offered server software and media player programs. [Aoife White and Matt Moore, AP Business Writers]
This is a case of too little too late and it shows why I have a hard time feeling sympathy for Microsoft. Microsoft has existed under the threat of antitrust prosecution for many years. It has paid out billions of dollars in antitrust settlements. By definition, the antitrust laws are predicated that the successful must sacrifice themselves for the unsuccessful. Yet when has Microsoft publicly attacked this premise? When has Microsoft attacked the antitrust laws themselves?

The Center was initially founded on the goodwill Microsoft enjoyed from people who recognized that it was being attacked solely for its virtues and who stood with us when we called for the antitrust case against it to be dropped and that the antirust laws themselves be re-evaluated. Microsoft found support because people supported it morally—they were willing to stand up and defend Microsoft moral right to profit from its employees own hard work.

The irony is that Microsoft is convinced that it could do no more to defend itself. Yet is that belief true? Has Microsoft ever “fully fought” antitrust? Of course not. Almost eight years after the initial “finding of fact” that dammed Microsoft for the crime of improving its products, Microsoft still has not learned that there is no escaping antitrust and that it only grounds it has left in self-defense are the moral grounds. Will Microsoft ever sanction this moral crusade? I seriously doubt it. Instead, Microsoft is utterly content to sanction its victimization, and in that light, the firm deserves whatever punishment it gets. Some other innovator will have to defend his right to exist free of shackles—this one is all too content to be ruled.

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