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The day after the announcement of the European Commission's decision on ... Microsoft's share values were up by 3 percent.
While the Commission imposes a one-time fine of 1% of the liquid cash reserves of Microsoft on the company, the decision implies an extreme interpretations of the TRIPs treaty, by which Microsoft is authorised to charge a "fair remuneration" for the use of any proprietary protocols on which it has obtained patents in Europe.
This means that, unless the European Parliament's amendments to the proposed software patent directive are fully accepted, Microsoft will have received official green light from the European Commission for killing its main competitors.
As the Register reports:
- Far from penalizing Microsoft, Wednesday's decision by the European Commission assures a bright future for the company as a patent licensing operation, according to one representative only two open source interests called to testify before the investigation. Because Microsoft will be allowed to pursue royalty revenue from the APIs it publishes, Jeremy Allison says that the projects such as Samba, which he jointly leads, may face a prohibitive hurdle. Microsoft's competitors use software such as Samba to access file and print services on Windows machines. The EC's investigation was brought about by Sun Microsystems, which through ventures such as 'Project Cascade', tried to do in proprietary form what Samba and similar projects such as Novell's Evolution Exchange client do in software libre form: provide a compatible, interoperable infrastructure to compete with Microsoft's enterprise software. Microsoft's rivals have become increasingly reliant on these free software projects. But Wednesday's decision unexpectedly divides the anti-Microsoft camp, says Allison. "The EU had a wonderful opportunity but it got greedy," he told us yesterday. "This splits the competition."
Moreover, as Hakon Wium Lie, CTO of Opera Software, one of Microsoft's few remaining competitors in the web browser market, says: "It is never fair for any company, no matter of what size, to charge any competitor for the mere use of protocols which are required for interoperation. The only fair remuneration for such use is no remuneration at all. That's why at the World Wide Web Consortium we decided that web standards must be royalty-free. The same should apply to all commmunication standards."
This position has also been stated by the European Parliament in the amended Art 6a on the limits of patent enforcement with respect to interoperability.
However, the European Commission is fighting against Art 6a of the European Parliament, based on the same extreme interpretations of the TRIPs treaty which it used to further the monopoly interests of Microsoft in the competition case.
YY, professor of competition law, explains what is wrong with the Commission's interpretations of TRIPs : ....
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The Commission seems to have adopted these interpretations of TRIPs under pressure from Frits Bolkestein, the commissioner of the directorate for the internal market.
Bolkestein's directorate has been threatening the Parliament and misinforming the Council in order to promote extreme interpretations of TRIPs and to pave the way unlimited patentability of software and business method patents in the EU.
The texts which Bolkestein's directory has been using in this process came from the European Patent Office and from the Business Software Alliance. The software patent directive proposal carried the handwriting of the same circles close to BSA and Microsoft which appeared in a document of the US government against the European Parliament's Article 6a which was circulated to MEPs by the US representation in Brussels in early september 2003.
When the EU Competition Commission initiated the lastest investagation against Microsoft in 2001, they included the following in their press release. http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/01/1232|0|AGED&lg=EN&display=
- To enable alternative server software to interoperate in the prevailing Windows PC and server environment, technical interface information must be known. Without such information, alternative server software would be denied a level playing field, as it would be artificially deprived of the opportunity to compete with Microsoft's products on technical merits alone. The Commission believes that Microsoft may have withheld from vendors of alternative server software key interoperability information that they need to enable their products to 'talk' with Microsoft's dominant PC and server software products. Microsoft may have done this through a combination of refusing to reveal the relevant technical information, and by engaging in a policy of discriminatory and selective disclosure on the basis of a "friend-enemy" scheme.
It is time to remind Mario Monti, Competition Commissioner that any licensing that Microsoft offers that is incompatible with the competing CIFS file and print services software that the protocol complaint was based on, the GPL'ed SAMBA, would be engaging in a policy of discriminatory and selective licensing on the basis of a "friend-enemy" scheme.