US group manages to mollify watchdog

It is not often that Microsoft gets a pat on the back from its old adversary. But on Monday, the European Union's top antitrust enforcer pronounced itself “happy” with at least some aspects of the US software giant's latest peace offer.

The unusually sunny reception came after months of conflict between the European Commission and Microsoft over how the group should implement last year's landmark antitrust ruling.

The two sides found it particularly hard to reconcile their views on a crucial part of the ruling that forces Microsoft to share more information about the Windows operating system with rival companies.

Although the group said it was ready to do so, Brussels criticised the conditions Microsoft intended to impose on potential licensees as unfair.

Many of these conditions have now been improved: the group will, for example, make some 10 per cent of the more than 50 protocols available without charging royalties.

Royalties for the other protocols would be subject to the independent review of a monitoring trustee, and would be set according to “standard valuation techniques”, Microsoft says.

Microsoft will also offer companies more scope to pick and choose what protocols they want to use and pay for. Brad Smith, the group's general counsel, says there will be at least 40 different packages of protocols to choose from, and that Microsoft will allow further customisation if asked.

Yet despite these concessions, it was clear on Monday that neither Microsoft nor the Commission is ready to bury the hatchet quite yet. By far the biggest obstacle is their continuing disagreement over the degree of openness Microsoft should show towards open-source software developers.

“I remain determined to ensure that all elements of the decision [of March 2004] are properly implemented. This includes the ability for developers of open source software to take advantage of the remedy,” says Neelie Kroes, the EU competition commissioner.

Brussels has long been keen to ensure that developers of open-source software can make as much use as possible of the information Microsoft will be forced to divulge. That desire, at least in part, reflects therealisation that the growing popularity of open-source products presents perhaps the greatest challenge to Microsoft's dominance.

And seen from Brussels, any movement that might help curb the power of Microsoft deserves a helping hand.

The Commission says that it should be possible to distribute products developed with the help of some communication protocols through an open-source licence.

Brussels insists this would only apply to “non-innovative” protocols, which do not cover “patentable” technologies.

Brussels insists it has no immediate plans to enforce such a measure, but that did not stop Microsoft from threatening further legal action against Brussels yesterday: “We are comfortable turning to the courts for guidance on this issue,” Mr Smith says.

The remark made clear that, despite all the warm words spoken on Monday, the antitrust battle between Microsoft and the Commission is unlikely to conclude any time soon.