By David Lawsky
Microsoft said it was posting on the Web confidential documents used
in its defense as it fought the threat of European Commission
antitrust fines reaching up to 2 million euros ($2.4 million) a day.
The U.S. software giant planned to post the documents at 1800 GMT on
Thursday at http://www.microsoft.com/presspass/legalnews.mspx, including an
exchange of letters between its chief executive, Steve Ballmer, and EU
Competition Commissioner Neelie Kroes.
"Transparency is vitally important in what can be a very opaque process in
Brussels. We've decided to open this up so people can understand the
issues," said Horacio Gutierrez, Microsoft's European associate general
counsel.
The Commission says Microsoft failed to comply with remedies it imposed in
2004 for the company's violation of antitrust rules. Specifically, the
Commission says Microsoft failed to produce required documentation in a form
that worked.
"Microsoft has ... supplied this documentation in a usable form in accord
with industry practice," the company said in the introduction to its
documents.
Microsoft is opening defense documents it sent in response to a statement of
objections from the Commission, minus business secrets, but has no plans to
post the Commission's objections.
The Commission considers those objections confidential and had little to
say.
COMMISSION SAYS LITTLE
"We are carefully analyzing (Microsoft's) reply and after they have had the
opportunity to present their arguments at the oral hearing we will decide
whether or not to impose a daily fine," Commission spokesman Jonathan Todd
said.
The hearing, as yet unscheduled, will be closed.
The Commission found in 2004 that Microsoft used the dominance of its
Windows operating system to damage rival makers of work group server
software, used to run printers, password sign-ins and file access for small
groups of connected computers.
Microsoft was fined 497 million euros and ordered to provide
interconnections so competitors could get their server software to work as
well as Microsoft's own with Windows desktop machines.
Microsoft appealed -- that case will be heard by an EU court in Luxembourg
in April -- but in the meantime the Commission said the company had not
carried out the sanctions.
Microsoft's reply covers a lot of ground, focusing on questions of timing,
dealing with criticisms and suggesting an alternative way of approaching the
problem.
At least one other lawyer has posted documents to the Web in a case
involving the Commission. In 2000, lawyer Stephen Kinsella posted a
statement of objections for the International Motoring Federation.
"I took the view that any confidentiality was for the protection of my
client. Therefore they could choose to waive that confidentiality. That
decision was not challenged by the Commission," Kinsella said.
Kinsella, whose firm Sidley Austin represents an organization that has
intervened on the side of Microsoft, said when a case had intense interest
it might make sense to provide full access to avoid the danger of selective
quotes and leaks.
Microsoft says the Commission's instructions were unclear.
"The Commission went more than nine months without suggesting to Microsoft
that the scope of the interoperability information provided was too narrow,"
the company said, adding that its staff spent 8,000 to 9,000 hours putting
it together.
"Microsoft has never refused to supply technical documentation that the
Commission has requested," the company said, calling the charges "false,
misleading and unfair."
But a Commission monitoring trustee, one of several nominated by Microsoft,
as well as competitors and a technical review committee gave Microsoft's
documentation scathing reviews. The trustee called it "fundamentally
flawed."
The company relied in part on consultant reports to respond.
Imperial College Consultants said neither the trustee nor competitors --
including Sun Microsystems and IBM -- had "devoted sufficient effort" to a
sound evaluation of the documentation.
"All the competitors state that they are unable to perform a proper
evaluation, before going on to opine of the matter of completeness and
accuracy," the consultant said.
More broadly, the company suggested the Commission could look at the process
used in the United States, where a court also found that Microsoft had
violated antitrust law.
There, a settlement was reached and Microsoft now has 28 licensees. Each
month a judge reviews the process, at the same time that both sides work
with the Justice Department.
"A similar process could wisely be followed under the (European Commission)
2004 decision as well," the company said.
Copyright 2006 Reuters Limited.
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David Lawsky (reuters@telecom-digest.org)