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European antitrust chief concerned over MS Palladium?

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The European Union antitrust investigation of Microsoft is going to take forever, and Europe has now added Palladium to the list of issues it's not going to focus very hard on for a very long time. We jest, of course, because this isn't quite what Philip Lowe, incoming EU Director General for Competition, told the American Antitrust Institute yesterday, but he did indicate that Brussels is not going to move on Microsoft until the dust has started to settle on the US case, and that this could easily take until the end of the year.

The European Commission has the power to act swiftly if it wants to, and towards the end of last year it was signalling that it could come to a decision early this year. It clearly has not done so, and the most plausible explanation for this is, as Lowe says, that it is shadowing the US antitrust authorities. If the MS-DoJ settlement had stood unchallenged, or the challenge from the dissenting states had been neutralised swiftly, then yes indeed we might have had a resolution in Q1, and then the way might have been clear for the Commission to move.

Neither of these things happened, and depending on Judge CKK's next move, the US case could still have a way to run. Lowe says Europe won't be in a position to take action until there is "more clarity" on the US side. He also says there will be discussions with the US authorities on the matter.

He didn't elaborate on the nature of these discussions, but they're quite likely to be heated. In May US DoJ head Charles James made menacing noises about the European investigation, and if he finally manages to get the setttlement (or something close to it) through, a serious clash with Europe looks on the cards.

And Palladium? Lowe says that Europe will ensure that Microsoft's competitors aren't locked out by the new security system, which you might think is something of a mixed blessing. If Europe starts keeping an eye on Palladium and related developments now, then it stands a reasonable chance of making sure there's a level playing field, meaning that lots of companies can offer Palladium/TCPA systems. Er, do we want this?

On the other hand, European scrutiny will be likely to address the Open Source issues associated with Palladium/TCPA, and European focus on the system's privacy issues could also be helpful. This latter isn't of course Lowe's bag, but it is on another part of the Commission's turf. Aside from potential antitrust issues raised by Palladium, there are also going to be problems over the trustworthiness of the companies who select themselves to look after your personal data, so Brussels' inclination to regulate them might be helpful.

But maybe you'd best not hold your breath, considering the context. Lowe's remarks on Palladium were made to a small group of journalists, in response to a question from AP's Ian Hopper. So really, Lowe was simply responding in fairly general terms to a 'what if' scenario put to him by a journalist, and has as yet no specific views or intentions as regards Palladium.

Hopper has mailed us requesting credit for the creation of this story, and we are of course happy to oblige, as always.

Aside from delivering some interesting answers to questions, the reason Lowe was actually at the American Antitrust Institute was to deliver a speech on Competition Policy in the European Union. This is, frankly, dull but worthy. If however you'd like some explanation of the diffrences between the US and Europe in this area, you'll find the speech here. ®

Related stories:
MS Palladium protects IT vendors, not you - paper
MS to micro-manage your computer
MS DRM OS, retagged 'secure OS' to ship with Longhorn?

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