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MS to Europe: opening source would break patent laws

The international incident as antitrust weapon

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Could this be a gauntlet? In its response to the European Commission's accusations of anti-competitive behaviour, Microsoft has claimed that the Commission forcing it to license its source code would break international patent laws. And it has noted: "The proceedings before the Commission are inevitably affected by the settlement that Microsoft has entered into with the US Department of Justice."

These little snippets from the 102 page document, which was leaked to Bloomberg yesterday, might just be read as Microsoft drawing a line in the sand. The Commission does indeed have the power to force Microsoft to license its source code, but if it did so it would, in Microsoft's view, be breaking international law, and setting itself up for a tussle with the US authorities and the World Trade Organisation. It almost sounds like a threat, and that might not be wise at this juncture. The reference to the DoJ deal reinforces this - if the penalties imposed by the Commission are seriously tougher than those negotiated in the US, the sometimes precarious detente between European and US antitrust authorities could collapse. Do you feel lucky, Mario?

Microsoft does however seem to be over-egging the pudding by going on about "compulsory licensing," which is what it claims Sun and IBM have asked for. Sun's complaint, could be tackled effectively simply by allowing the company access to those parts of Microsoft's code that link client systems to servers - WABI was a long time ago, and Sun most definitely didn't ask the Commission for help in reviving it. IBM's complaint, on the other hand, is an enigma. Until Microsoft mentioned it we'd no idea that IBM had made a complaint, and frankly, we doubt it has. Big Blue skulking in the shadows in Brussels alleyways again, undoubtedly, sticking stilettos into hapless monopolists...

In the document Microsoft also defends itself against charges that it made up letters of support from its customers; this seems deliciously lame. There were 34 letters, Microsoft says that the Commission may have shown that five or six of the companies concerned didn't know the information would be used in its antitrust defence, but that at least 23 did know this. Which according to our calculations leaves at least five Microsoft doesn't know about, or thinks it hasn't got caught for yet.

The issue seems to have arisen in the first place from the sheer idiocy of the mechanism Microsoft adopted in order to obtain the letters of support. Two lawyers, one from Microsoft, were given the task of interviewing senior technology execs of the companies involved, and from these interviews they drafted letters for the companies to sign. The notion of just asking your supporters to write letters, and not getting yourself involved in a process whereby the letters would inevitably be massaged, seems to have been entirely alien to Microsoft. Which is pretty much par for the course. ®

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